Recruiting in China

* Sees FY earnings down 7-10 pct at constant currencies
* Says one office visited by authorities in China
* Says not aware of visit purpose
* Q2 business net income down 23.4 pct to 1.48 bln eur
* Shares down 6.2 percent (Adds details, CEO comments, background)

By Elena Berton

PARIS, Aug 1 (Reuters) - Sanofi SA cut its 2013 earnings forecast as it reported a steeper-than-expected drop in second-quarter profit, hit by the effect of patent losses, currency fluctuations and an inventory setback in Brazil.

The French company also said one of its 11 regional offices in China had been visited by the State Administration for Industry and Commerce (SAIC (NYSE: SAI - news) ) in Shenyang, but added it was not aware of the purpose of the visit from the agency.

A probe by Chinese authorities into the activities of GlaxoSmithKline (Other OTC: GLAXF - news) led to allegations of a wide-reaching bribery scandal last month and prompted speculation that other international companies could be drawn into the investigation.

"We are not really aware of the purpose of the visit, we are working with," Chief Executive Chris Viehbacher told reporters on Thursday. SAIC is one of China's anti-trust regulators in charge of market supervision, which also looks into low-level bribery cases.

Viehbacher added that the French group's local head office in Shanghai had not been contacted by Chinese authorities.
China's 21st Century Business Herald earlier reported Sanofi (NasdaqGM: GCVRZ - news) and U.S. drugmaker Eli Lilly & Co had confirmed visits to their offices by the Shenyang bureau of the SAIC.

Sanofi said in an emailed statement to Reuters that the agency visited its offices on July 29, but said the purpose of the visit was unclear.

Eli Lilly said in a statement to the newspaper that the visit was a routine inspection by the relevant government departments that occurred in early 2013, and was completely different to previous industry investigations led by the public security bureau.

"Regarding this inspection, we have fully cooperated," the U.S. group told the paper. Lilly representatives in China did not respond immediately to a request for comment from Reuters.

China remains a priority market for Western drug makers, which can command hefty price premiums for their medicines even though they are no longer protected by patents.

TOO EARLY

A promise this week by GlaxoSmithKline to make its drugs more affordable in China in the wake of the bribery scandal could be a lever for Chinese authorities to start redressing the balance.

Viehbacher said it was premature to say what repercussions the scandal would have on Sanofi's business in China.

"We are examining the issue closely and we are examining our business in China, but I think it's too early to draw any conclusions," he said.

Sanofi also predicted earnings this year would be between 7 and 10 percent lower than in 2012 at constant exchange rates, but said it continued to expect to return to growth in the second half of 2013.

Sanofi had previously forecast that annual profit would be flat to 5 percent lower at constant currencies.

Its shares were down 6.2 percent at 75.13 euros by 0758 GMT, the biggest losers in the CAC 40 (Paris: ^FCHI - news) index in Paris which was up 0.3 percent.

"Whilst this is disappointing, the one-time nature of most of the areas of weakness now creates even easier comparatives for the growth rebound expected in the second half of 2013 and beyond," analysts at brokerage Jefferies said in a note to clients.

The group's closely watched business net income, which excludes items such as amortisation and legal costs, declined 23.4 percent to 1.48 billion euros ($1.96 billion), below an average of 1.79 billion in a Thomson Reuters I/B/E/S poll of nine analysts.

Sales shrunk 9.8 percent to 8 billion as last year's patent expiry on anti-clotting drug Plavix, once the world's second-best selling prescription drug, sliced 481 million euros off revenue in the quarter.

The group's generics business in Brazil was hit by much higher-than-planned inventory levels during the second quarter, Sanofi said.

As a result, Sanofi had to adjust sales by 122 million euros and book an additional provision of 79 million to write off the inventory and other related costs. ($1 = 0.7531 euros) ($1 = 6.1289 Chinese yuan) (Additional reporting by Michael Martina in Beijing; Editing by Christian Plumb and David Holmes)

Firm expects to hire around 80 people

CONOVER, NC — Folks in these parts are used to jobs connected to the textile industry moving overseas but a Chinese company is locating here and creating nearly 80 jobs.

Catawba County Economic Development Corporation announced on Thursday that Wuxi Taiji Paper Industry Company Ltd. is putting its first US manufacturing location in Conover and will hire 78 workers over the next four years. The company is buying the former Prestige Pillow 50,000-square-foot building, located at 405 Wortha Herman Road SW in Conover. It plans to invest $3 million, say EDC officials.

The company makes spiral-wound cardboard tubes and cores used in multiple industries, including the textile industry, according to information from the county EDC.

Julie Pruett, director of business recruitment for Catawba County Economic Development Corporation, said the jobs will include administration, sales and production. The first phase of hiring will start soon, according to information from the county EDC.

While salaries will vary according to the job, the overall average annual salary is more than $31,000, not including the additional benefits package, according to information from Catawba EDC.

The company is not receiving any incentives from the county or state, Pruett said. But it will get tax credits for the jobs it creates, she said.

Pruett said the company wants to have its equipment moved into its new building by February and be up and running by March.

“We are determined to be a respected tube and core supplier in North America,” says Mr. Meizong Yin, the company president.

The company is following what appears to be a trend to localize manufacturing. In other words, if a company sells in the US, it makes its products in the US, say officials.

“We are honored that Mr. Meizong Yin selected Conover as their first manufacturing footprint in America,” said Conover Mayor Lee Moritz Jr. “Our citizens are appreciative for this opportunity to become a member of the TAIJA Group team. It is exciting to see visionary international companies like TAIJI Group recognize the value of American manufacturing.”

Conover was competing against areas throughout the state, as well as locations in Virginia, Pruett said. County EDC and the state Department of Commerce officials have been working with the company since September, she said.

“It makes good business sense to locate their US operation in Catawba County which is the most specialized area for manufacturing in North and South Carolina,” Pruett said. “We were fortunate to have an available building with adequate ceiling heights and square footage that would meet the client’s needs.”

The company also chose Conover because it is centrally located near its customers, Pruett said.

The Taiji Group was established in China in 1994. In addition to the Chinese market, the company also has customers who are leading multinational companies in South East Asia, Europe and North and South America, according to information from Catawba County EDC.

“We welcome TAIJI Group(USA) Inc. to Catawba County and applaud their commitment to grow their business in the United States by investing in the people of Catawba County,” said Kitty Barnes, chair of the Catawba County Board of Commissioners.

To apply for a job with Wuxi Taiji Paper Industry Company, contact the Catawba County office of the NC Department of Commerce Division of Employment Security at 466-5535. The employment office is located at 3301 US 70 SE, Newton.

China tops any other Asia-Pacific market in its number of companies that plan to hire more employees, a report says.

Nearly 56 percent of organizations interviewed for a report by the global human resources company Hudson, said they plan to increase the number of permanent staff in the first quarter of 2013.

The enthusiasm to hire comes amid the recovery in the growth of the Chinese economy and an increasing number of multinationals moving their regional headquarters to China, said Lily Bi, general manager of Hudson Shanghai.

The salaries offered to talented workers will also increase, Bi said.

"International giants and local companies are attaching more importance to research and development work. Therefore, talented professionals have plenty of opportunities, especially in the pharmaceutical and automotive industries," said Bi, stressing that higher salaries offered to sought-after workers is another trend taking shape in the Chinese job market.

Multinational companies moving their headquarters to China, Shanghai especially, have also helped to create more jobs.

According to statistics provided by the Shanghai Municipal Commission of Commerce, as of September 2012, around 60 multinational companies had Asia-Pacific or Asian headquarters in Shanghai.

The pharmaceutical and biologics company AstraZeneca moved its Asia-Pacific headquarters from Singapore to Shanghai in June. McDonald's and Ikea have also moved their Asia-Pacific headquarters to Shanghai.

Although its economic growth slowed in 2012, China is still the second-largest economy in the world. The central government forecast that the country's GDP will grow by 7.5 percent in 2013 and its unemployment rate will remain stable at around 4 percent.

China is now the world's fastest-growing automobile market and skilled professionals are needed to sustain expansion, particularly in smaller cities. Salary packages are becoming more streamlined and bonuses are down, but candidates are ambitious and looking for increments of up to 25 to 30 percent to switch roles, the report said.

Guo Yating, 32, with three years of experience as an automotive research and development engineer, moved to AVL, an Austrian-based automotive consulting firm, in December with a 50 percent salary increase and a 10-day extension of annual leave to 15 days.

"Frankly speaking, the chances were far scarcer in 2011 and 2012 when the economy, especially the manufacturing industry, was pretty lousy. It was quite difficult for fresh graduates to get a job. But on the contrary, R&D engineers with experience have been receiving more enquires from headhunters in the previous two years," Guo said.

Bi from Hudson said salary increases will also be offered to people working in newly opened positions, even though they are in older sectors such as the advertising industry.

"Employees with expertise in digital and new media, e-commerce and social media may receive increments of up to 20 percent," she said.

Li Daifei, 28, a project manager at a Shanghai-based advertisement agency, was offered her current job at the end of 2012, which saw her salary rise by 40 percent. Her experience with digital media helped her make the switch.

Morgan Stanley plans to slash 1,600 jobs in what may be just the beginning of a new round of layoffs at large investment banks, this time driven by a deeper reassessment of Wall Street businesses in the face of new regulations and capital standards.

Morgan Stanley, the sixth-largest US bank by assets, plans to begin letting go of the employees, many of whom work in its securities unit, starting this week, two people familiar with the matter said.

A third person who has been involved with plans to cut staff at Morgan Stanley and other large banks said that Morgan Stanley’s cuts had been in the works for months, and that more are expected in the future.

Large global investment banks have been cutting staff for the better part of five years, when the financial crisis pegged to the US housing market began to seize up markets.

Firms previously focused their job cuts on areas where activity had screeched to a halt, such as securitization of mortgages, or that were explicitly banned by new regulations, such as proprietary trading.

But banks are now making strategic decisions about businesses in grey areas where management teams do not see major profit potential, or realize that their individual banks are not competitive, the third source said.

“It’s hard to look at yourself in the mirror, and say: ’I’m not good at this,’” said the source. But now that management teams are coming to those realizations, he said, they are beginning to make strategic decisions to exit businesses and cut more staff.

So far, the most prominent example of a bank making that kind of a tough decision is Swiss bank UBS, which said in October that it would exit bond trading altogether and eliminate 10,000 jobs.

Morgan Stanley has said it will not give up on the fixed income, currency and commodities trading business, known as ”FICC” in Wall Street circles. The firm has said it wants to boost market share in FICC by two percentage points.

But Morgan Stanley is aiming to exit more complex realms of bond trading that require more capital under new regulations.

The latest staff reductions will affect 6 percent of the institutional securities unit’s workforce, which includes the bank’s FICC business. The cuts will target salespeople, traders and investment bankers, the sources said. Support staff who work in areas such as technology will also be affected, the sources said.

Although all staff levels will be affected, the likely targets will be more senior employees who take in the biggest paychecks, and about half of the cuts will come from the United States, one of the sources said.

The cuts are also notable because, unlike its chief rival Goldman Sachs, which culls the bottom 5 per cent of its workforce each year to improve performance, Morgan Stanley does not have such a staff reduction program.

Some analysts have questioned Morgan Stanley’s plans to gain market share in the bond trading business.

JPMorgan analyst Kian Abouhossein - who earlier said that Morgan Stanley should give up that goal - expects Wall Street banks to report a 10 per cent decline in revenue for the fourth quarter, compared with the previous period.

Bernstein Research analyst Brad Hintz, a former Morgan Stanley treasurer, said in a report on Wednesday that layoffs are expected in capital-intensive areas of Morgan Stanley’s fixed-income trading business, such as asset-backed securitization, synthetic products, structured credit and correlation trading.

“Investors continue to wonder how Morgan Stanley’s fixed income business will be able to generate steady returns and beat its cost of capital without massive changes to its business model,” Hintz said.

Morgan Stanley chief executive James Gorman has pledged to cut costs, and said in July that he planned to reduce overall staff 7 per cent in 2012. The new job cuts are in addition to that plan, the sources said, and come just a week after Colm Kelleher took over as the sole president of the securities unit on January 1.

The cuts represent less than 3 per cent of Morgan Stanley’s entire estimated workforce at year-end, following other staff reductions in 2012.

“This continues the steady drumbeat of negative news from banks,” said Greg Cresci, a Wall Street recruiter with New York-based Odyssey Search Partners. “It’s hard to tell where the bottom is, given how many banks have made similar announcements.”

Altogether, US financial firms announced plans to reduce payrolls by 38,135 jobs last year, in addition to 63,624 job cuts that were detailed in 2011, according to employment consulting firm Challenger, Gray & Christmas.

“We are seeing a redrawing and restructuring of the industry,” said John Challenger, chief executive of the firm. “The map continues to be redrawn in terms of regulation, who the competitors are, and the resources banks are willing to commit to the investment banking business.”

In addition to earlier job cuts at Morgan Stanley and UBS, Goldman Sachs cut 700 jobs during the first nine months of 2012 as part of a plan to reduce annual expenses by US$1.9 billion.

Citigroup announced plans last month to cut 11,000 jobs, including some in investment banking and trading, to save US$1.1 billion in annual expenses. Credit Suisse Group is also cutting securities jobs to reach an annual cost-savings target of 1 billion Swiss francs (US$1.1 billion), while Bank of America is in the process of cutting 30,000 jobs across the firm in a plan unveiled in 2011 to save $5 billion in annual expenses.

Morgan Stanley shares fell 0.2 per cent to close at US$19.62 on Wednesday. Its shares are up 15 per cent over the past 52 weeks, part of a broad rally in financial stocks.

Changes to Chinese employment law will limit the use of agency workers by companies, as well as guaranteeing those workers the same rights as those hired directly.08 Jan 2013

An amendment to the Labor Contract Law (Chinese) will limit the use of 'labor contracting agents' by companies to "temporary, supplementary or back-up jobs". The change, which has been adopted by the National People's Congress Standing Committee, is due to take effect on 1 July 2013 according to national press agency Xinhua.

The Labor Contract Law is one of China's main sources of employment legislation. It came into force in 2008 and is administered by the Ministry of Human Resources and Social Security. Among other provisions, the law requires employers to pay employees' health insurance and social security contributions, and includes protection for employees on probation and working overtime.

According to Xinhua, the amendment was proposed in June to prevent employers hiring long-term workers through agencies. According to Ministry figures, China had 37 million agency workers in 2011.In practice, companies can pay these workers much less than those recruited directly as they are categorised as 'dispatched employees'.

The amendment reiterates a right for agency workers, or "dispatched workers", to receive "equal pay for the same work" carried out by a company's "formal employees". Employers must "adopt the same remuneration distribution measures of its formal employees at the same position for such dispatched worker".

Employers will also be required to hire the majority of their workforce directly, rather than via contractors, and to strictly control the number of 'leased workers' they hire. The amendment also clarifies those roles that can be filled by agency workers. 'Temporary' jobs are those lasting no longer than six months, while 'back-up' jobs are those that can be taken over while permanent workers are on maternity, study or holiday leave.

The amendment also creates new administrative rules for labor contracting agencies. The minimum amount of registered capital that an agency must hold has been increased to 2 million yuan, while agencies will also be required to obtain administrative approval before they can begin arranging employment contracts.

At a press conference to introduce the changes Kan He, vice chair of the committee's legislative affairs commission, told Reuters that the changes were intended to "prevent abuse".

"The regulations control the total numbers and the proportion of workers that can be contracted through agencies and companies cannot expand either number or proportion at whim," he said. "The majority of workers at a company should be under regular labor contracts."

(Reuters) - In September, the largest factory in the northeastern Chinese coastal city of Yantai called on the local government with a problem - a shortage of 19,000 workers as the deadline on a big order approached.

Yantai officials came to the rescue, ordering vocational high schools to send students to the plant run by Foxconn Technology Group, a Taiwanese maker of smartphones, computers and gaming equipment.

As firms like Foxconn shift factories away from higher-cost centers in the Pearl River Delta in southern Guangdong province, they are discovering that workers in new locations across China are not as abundant as they had expected.

That has prompted multinationals and their suppliers to use millions of teenage students from vocational and technical schools on assembly lines. The schools teach a variety of trades and include mandatory work experience, which in practice means students must accept work assignments to graduate.

In any given year, at least 8 million vocational students man China's assembly lines and workshops, according to Ministry of Education estimates - or one in eight Chinese aged 16 to 18. In 2010, the ministry ordered vocational schools to fill any shortages in the workforce. The minimum legal working age is 16.

Foxconn, the trading name of Hon Hai Precision Industry, employs 1.2 million workers across China. Nearly 3 percent are student interns.

The company "has a huge appetite for workers", Wang Weihui, vice director of the Yantai Fushan Polytechnic School, told Reuters during a recent visit to the city.

"It tightens the labor market," said Wang, whose school sends its students to work at Foxconn and other firms.

Local governments eager to please new investors lean on schools to meet any worker shortfall. That's what Yantai, in Shandong province, did in September when Foxconn had trouble filling Christmas orders for Nintendo Co Ltd Wii game consoles.

"It has been easier to recruit workers in the Pearl River Delta than some inland locations," Foxconn told Reuters in written comments in late December.

Some companies cite rising wages in southern China for the shift elsewhere. Wages are a growing component of manufacturing costs in China, making up to 30 percent of the total depending on the industry, according to the Boston Consulting Group.

Wages began to rise around 2006 as the migration of rural workers to Guangdong ebbed. China's one-child policy, plus a jump in higher education enrollment, further depleted the number of new entrants to the workforce, forcing up wages.

That prompted American carmakers, Korean electronics manufacturers and private Chinese firms to look for new sites. Cheaper electricity, land and tax incentives as well as a growing consumer class in regions beyond the booming southern coastal provinces were other reasons to relocate.

Minimum wages in Yantai can be as low as 1,100 yuan ($180) a month compared to 1,500 yuan in Shenzhen, a city near Hong Kong.

What makes vocational students attractive is they can be paid less than full-time workers, although some firms - including Foxconn - pay the same base wages.

Even if they pay the same base salary, employers can save 10-40 percent per person because legally they do not have to pay health insurance or social security benefits for student interns.

Yantai was not the only local government to help Foxconn.

Two months earlier, Foxconn's 100,000-worker factory near the city of Zhengzhou in Henan Province was racing to meet a deadline for Apple Inc's iPhone 5.

Henan authorities told its cities to find 30,000 more workers for Foxconn, according to a Zhengzhou city government notice reprinted by the Hong Kong-based labor rights group, Students & Scholars Against Corporate Misbehaviour, or SACOM.

THE YANTAI MICROCOSM

Yantai shows how much China's labor market has changed.

Zhang Weifang, head of human resources at the Yantai factory of LG Innotek estimates the city's employable 16- to 18-year-olds has halved since her firm began production in 2004. LG Innotek is the components unit of South Korea's LG Electronics Inc.

"It's really hard to find people nowadays," she said.

About 2,400 young workers staff Zhang's factory, of which one-third are vocational students or workers contracted through agencies.

Students are sought after by plants which need extra workers during peak production periods, especially since China's 2008 Labor Law makes firing employees cumbersome.

And students are plentiful. Vocational school graduation has surged 26 percent in the last five years, to 6.6 million students in 2011. Parents whose children cannot compete in China's exam-driven high schools look to vocational schools.

Such students made up such a large percentage of a Honda Motor plant in southern China that when they went on strike for better pay in 2010, they crippled Honda's production chain. A Honda spokeswoman said the ratio of students to regular employees had significantly declined, but would not give a figure.

About 2.7 percent of Foxconn's workforce in China comprises vocational students, the company said in October. That works out to 32,400 teenagers.

"This program gives Foxconn an opportunity to identify participants who have the potential to be excellent full-time employees should they wish to join our company upon graduation," Foxconn said in a statement at the time.

That month, Chinese state media said 56 minors under the legal working age were among students sent to work at Foxconn in Yantai. Foxconn removed the underage students from the plant after the reports.

Chinese law limits students to eight hours of work a day, with no night shifts. Vocational students in Yantai told Reuters they had worked up to 12 hours a day, and routinely did night shifts at Chinese and foreign-invested factories.

Foxconn has a program with Apple, one of its main customers, to pay interns the same wages as other workers, limit their work to eight hours a day, five days a week and allow them to quit if they want.

More than a dozen students interviewed by Reuters in Yantai had a mixed view of their internships, ranging from relatively positive to outraged. Many said it taught them to look for something other than assembly line work after graduation.

Most three-year vocational programs require a two-month internship in the second year, while the third is spent entirely at work. Even though students know they need factory experience to graduate, the assembly line comes as a shock to some.

"At the beginning I was really excited. I thought I could get experience and help out my family with some money," said Yu, 17, an intern in Yantai. She asked that her full name not be used.

"To suddenly encounter 12-hour work shifts, standing, with only 40 minutes to rest and eat, our legs can't stand it."

Some students said they hoped the work would improve their prospects.

"Electronics is our major and so this will help in finding jobs," said vocational student Sun Chuangjiao, a former Foxconn intern.

Companies defend the internships as educational as well as a useful recruitment strategy.

"The vast majority of our interns and the schools that sponsor them find their experience with us relevant and meaningful, and an important first step in their career development," Emerson Electronic told Reuters.

It employs 40 interns for eight-month stints, out of a workforce of 1,063 at its air conditioner compressor plant in the Yangtze Delta city of Suzhou. All are over 18, it said.

LOOKING FARTHER AFIELD

The shortage of labor means companies often search far and wide for vocational schools to supply workers.

Zhang of LG Innotek said she had contacted schools across China to find interns while Mok Jangkyun, an auditor with Samsung Electronics, told Reuters he drove a full day after flying to Guizhou province in southwest China to vet a vocational school sending interns to its supplier factories.

Samsung did an audit of factories after activists found underage workers with fake IDs at one of the electronics giant's 250 supplier factories in China. The South Korean company said it did not find underage workers at any of its suppliers.

Supplying vocational students can be lucrative.

Some students in Yantai said their school took 500 yuan from their monthly wage. Their school declined an interview request.

Some companies pay teachers directly to keep students in line in dormitories and on the factory floor, SACOM has found. In other cases, companies pay management fees or set up extra facilities at schools.

Foxconn says while it pays teachers who supervise students, it usually does not compensate schools.

"However, in some cases, we do provide compensation to meet their overall administrative costs," it said. ($1 = 6.2335 Chinese yuan)

The Central Economic Working Conference (CEWC) proposes the government enhance people’s livelihood and improve the standard of living. The goal is to be addressed under the guidelines of “keeping the bottom line, highlighting the key points, improving the mechanism and positively guiding the public opinion”.

The CEWC highlighted guaranteeing the basic life of low-income people. The government pledges to finance students born in poor families. Attention will be paid to stabilizing and expanding employment. The government will also strive to create more job opportunities for college students.

The government plans to shore up the development of small businesses and push large enterprises to recommit to corporate social responsibilities. The social insurance systems in both rural and urban areas will be enhanced. China will continue to intensify the construction and management of affordable housing and accelerate the transformation of shantytowns.

The Chinese government vows to lead people to setting in mind that to improve the living standard or become well-off is through hard work.

“To guarantee people’s livelihood requires the government to not only make every effort, but also have a clear evaluation of its own capability. To ‘keep the bottom line and highlight key points’ is very important,” commented Zhang Li Qun, researcher of macro-economic department in Development Research Center of the State Council.

Zhang said that one of the key points of the government’s work is to provide basic public services, and the bottom line is to guarantee the basic livelihood of people. The low-income group is problematic in society, and they especially need the help from the government. Furthermore, with the slowdown of economic growth and the promotion of economic restructuring, some people’s employment and income is expected to be affected. Therefore, the corresponding guarantees should be prepared earlier.

Zhang came up with one conclusion: that to improve people’s livelihood, on one hand the government should expand economic input, and on the other hand people should create wealth through hard work. Neither of the two should be neglected.

Walt Disney Co started a recruitment campaign in China on Tuesday for its new theme park in Shanghai.

A total of 39 positions are being offered on the company's website to support the resort project in Shanghai's Pudong district.

Positions include assistant contract manager, IT infrastructure manager, and employees responsible for administrative management matters, purchasing, and engineering projects.

The resort, which is expected to open in 2015, will have a theme park, two hotels, various dining and entertainment venues, recreational facilities, a lake and transportation hubs.

The total investment is expected to reach 24.5 billion yuan ($3.84 billion) for the theme park and 4.5 billion yuan for the hotels and other facilities.

BEIJING: The Chinese government today said it has created 12.02 million new jobs in the first 11 months of this year surpassing the goal of 9 million.

The urban registered unemployment rate stood at 4.1 per cent at the end of September, below the annual target of 4.6 per cent, the Ministry of Human Resources and Social Security (MHRSS) said.

The employment situation has been better than expected this year amid the backdrop of slowing global economic recovery and downward pressures weighing on the domestic economy, state-run Xinhua news agency quoted Human Resources Minister Yin Weimin as saying.

Meanwhile, massive layoffs have also been rare this year, as a continuous labour shortage left employers more prudent about staff cuts, Zhou added.

Yin said the focus of next year's work will still be employment for college graduates, an expanding population that has hit 6.8 million this year.

China will carry out and improve policies in support of the employment and entrepreneurship of college graduates, expand their employment areas and introduce public recruitment services to campuses, Yin said.

To boost employment, the government also vowed to support the development of small and micro enterprises and strengthen social responsibility among large enterprises at the conference held on December 15 and 16.

China's total urban population in search of employment reached 25 million in 2012, far exceeding the 12 million new jobs created annually in recent years, data show.

Analysts have pointed out that in addition to the pressure to create more jobs, there is a notable gap between the skills of the unemployed and the skills required for certain positions.

Most industries in China are currently facing a serious shortage of skilled workers. The manufacturing sector alone, according to the MHRSS, is in need of about 4 million senior technicians.

iPhone 5 factory in a bad way

Claims by Apple and Foxconn that they had fixed the labour problems have turned out to be spin, according to a French expose by Envoyé Spécial.

Journalists from the public TV station France 2 went undercover at the Zhengzhou iPhone 5 Foxconn factory.

The programme, which is sort of a French Panorama, found many of the same problems the Chinese manufacturer and Apple promised to fix earlier this year.

According to Engadget, the report uncovers a nightmare of working conditions. Workers were forced to stay in partly built dorm rooms that had no elevators, electricity or running water.

A Foxconn manager was filmed warning workers not to plug devices into dorms that did have electricity, saying that eight workers were killed in a fire after overloading circuits.

Hacks interviewed lower-paid student employees who were of legal age to work there but were essentially slave labour. Corrupt school administrators told them they'd lose their diplomas if they didn't take a job at the plant.

Regular workers also claimed that much of their upgraded $290 monthly salary was still being absorbed by the company through housing, insurance and food charges.

Envoyé Spécial found that Foxconn had methods of clawing back wages from employees. These included a $7 for a psychological test supposed to weed out suicidal candidates. Foxconn does not pay, but workers did.

Foxconn is under pressure from Apple to turn out shedloads of the shiny toys to keep the wealthy and clueless of the world happy.

One employee said it is so difficult to meet the quota, the company has to recruit all the time to stem the turnover of frustrated workers.

Foxconn didn't discuss the above findings with French reporters on camera but has since admitted that it was not perfect.

It said that the company was making progress and was a market leader in meeting the needs of the new generation of workers in China.

Apple told Envoyé Spécial that its subcontractors were required to provide safe working conditions, dignity and respect to employees.

Apple said that it insisted all of its suppliers provide safe working conditions, treat workers with dignity and respect, and use environmentally responsible manufacturing processes wherever its products are made.

However, neither Apple nor Foxconn seemed keen to have another round of investigations at the new plant.

China's Labor Market Report 2012 just released in Beijing shows a large number of university students left campus without finding a job in the past decade. Experts believe that unversity recruitment expansion is not the cause of high unemployment among graduates. Boosting education reform and adjusting demand and supply in the labor market is the key to the solution.

The expansion of college recruitment started in 1999 when 1.6 million students were admitted to universities and colleges in China that year. The figure was 50 percent higher than the previous year.

After that, the student recruitment scale kept growing at a fast pace; in 2012, more than 68 million students entered universities and colleges.

Since 2002, the year when the first batch of students in the recruitment expansion period graduated, to 2012, more than 47 million college students graduated and entered the labor market. Their skill and knowledge effectively enhanced the general level of the labor force. Statistics show that less than 5 percent of the labor force in the year 2000 had received a higher education, this figure reached more than 10 percent in 2010.

However, the Dean of Chinese Academy of Personnel Science Wu Jiang says the rate of employees with a higher education in the Chinese labor market still lags behind other countries.

"This rate is far from sufficient. The figure in some countries already reached about 20 percent in 2005. We hope to achieve this goal in 2020."

Analysis indicates that if there were no college recruitment expansion, the pressure in the labor market may come more from the low-end market. It's hard to imagine what influence a large scale low-end labor market would have on the country in terms of the economy and family life.

In spite of the improvements, the first time employment rate among college graduates remain low. Figures show that from 2002 to 2012, more than 30 percent of the college graduates failed to find jobs before they graduate. That is to say, more than 1 million college graduates are unemployed every year.

The Labor Market Report 2012 also points out that among those unemployed, 40 percent are students of law, economic management, accounting, business and foreign trade. But 90 percent of the students majoring in science and technology, medical science, agriculture, education are employed following graduation.

Tang Min, counselor at China State Council says education reform is one of the key causes.

"The biggest problem is our education reform didn't follow up. A significant amount of students have a hard time in catching up the changes in the society and our universities failed to give them sufficient base knowledge to tackle the changes."

Dean of Economic Management Institute of Beijing Normal University Lai Desheng believes that the recruitment expansion should not be blamed for the college graduates' high unemployment rate.

The report also points out that there is a regional imbalance in the labor market because students prefer larger cities.

Xie Ying, is the director of medical reform team at a medical bureau in Bijie, a low income city in Guizhou Province.

"Most college graduates choose to work in bigger cities like Guiyang or Zunyi, rather than Bijie. Some students whose hukou, or residency permit, is here choose to come back to Bijie but there are very few who would like to work here."

The China Labor Market Report 2012 figures show that in the past 10 years, only 12 percent of the new graduates are willing to work in rural areas, and no big change has been seen in the rate since 2002.

Despite the fact that economic development in China's less developed mid- and western areas has improved in recent years, more than 50 percent of the graduates still choose to work in the east where the economy is better developed. Students who possessed master's and doctor's degree will spare no effort to find employment in cities like Beijing and Shanghai. This phenomenon remains prevalent.

Popular employment choices for graduates are education, public management, social organization and manufacturing. Information industry, media, real estate and commercial services are also popular.

BEIJING, Nov. 12 (Xinhua) -- China's job market is feeling the pressure from the country's economic downshift, as new job growth slows and more people become unemployed, a senior employment official said Monday.

"The impact of economic slowdown on the job market is starting to emerge," said Vice Minister of Human Resources and Social Security Yang Zhiming at a press conference on the sidelines of the 18th National Congress of the Communist Party of China, which opened on Nov. 8.

The growth of newly added jobs in cities has been narrowing since April, while job vacancies have dropped with higher registered unemployed number, Yang said.

"China will continue to face the problem of labor oversupply for a long time," he told reporters.

China's job market is under great pressure this year as nearly 7 million college graduates have entered the job market, while migrant workers and unemployed urbanites still have difficulty getting full employment, said Yang.

China's urban registered unemployment rate stood at 4.1 percent at the end of September, unchanged from the second quarter of 2012, according to official figures. It was lower than the officially set ceiling of 4.6 percent this year.

The country created 10.24 million new jobs in urban areas in the first nine months, exceeding the annual target of 9 million for this year.

Yang said the government will boost labor-intensive industries as well as strategic emerging industries to bring job growth along with economic development.

He said the government will encourage college students to work in the central-western regions or start their own businesses, facilitate the development of small- and medium-sized enterprises and offer better training for rural workers.

SHANGHAI - With the growth of the national economy and the continuous development of Chinese enterprises, more middle- and high-level professionals in China now prefer to work for domestic companies rather than foreign-owned enterprises, human resources experts said.

"Multinational companies have long been in a favorable position in the recruiting market due to their liberal reward and advanced management culture," said Chen Jiewei, senior consulting manager with China International Intellectech Corporation (CIIC), a Shanghai-based HR services company.

"But over the past five years, Chinese companies have been doing excellently and many of them have been listed abroad. They have demonstrated their competitive strength," Chen told China Daily, "Now they can offer salaries and bonus plans that are competitive with foreign companies, which makes them increasingly attractive for high-level management professionals."

A report from CIIC said that the annual salary for management positions in Chinese enterprises is basically equal to that in Japanese enterprises, about 200,000 yuan ($30,880) a year (before tax), while for European and US enterprises it is about 250,000 yuan a year. For director positions, European and US enterprises generally provide an annual salary of more than 400,000 yuan, while Chinese enterprises offer more than 300,000 yuan and Japanese enterprises about 300,000 yuan .

For senior management positions, the annual salary in a European or US enterprise is about 800,000 yuan, while large Chinese enterprises offer about 600,000 yuan and Japanese enterprises about 500,000 yuan.

But Chen said that it is not only the salaries that are driving high-level talent toward Chinese companies. It is also a better personal career path.

"Multinational companies have developed for a long time in China, and practiced a localization strategy, but even so, a lot of senior management positions are still dominated by foreigners. High-level Chinese staff often find it's hard to break through the bottleneck and advance," Chen explained. "They have no scope for their particular talents."

"Some large Chinese companies, on the other hand, can provide sufficient room for people's career development," Chen added.

"Chinese enterprises have developed very fast and improved effectively over the past years in terms of the management level, working environment, compensation packages, as well as the promotion system. They have competitive advantages over their foreign counterparts in recruiting staff," said a 33- year-old man, surnamed Wang, who declined to give his full name.

Wang currently works as a department manager in a US technology company but he hopes he can move to a Chinese company, especially a State-owned company.

"State-owned enterprises have improved their market performance and have comprehensive competitiveness. That means there may be more opportunities for self-development," Wang said.

State-owned enterprises overtook foreign and private enterprises as the top destination for job-seeking graduates in 2010, according to a survey of 200,000 students conducted by ChinaHR.com. Eight of the top 10 companies named in the survey are State-owned.

Chinese companies are more popular among students born between 1980 and 1990, majoring in science and engineering, according to a survey by Aon Hewitt, a global human capital consulting company.

Aon Hewitt polled graduates over the past two years and found that China Mobile, Alibaba and Haier have overtaken Google and P&G to become the most popular employers among graduates.

BEIJING, June 9 (Xinhua) -- More Chinese college graduates are finding jobs, with the employment rate back to the pre-crisis level and a significant rise in salaries, a latest survey shows.

The employment rate of college graduates has risen over the last two years to 89.6 percent in 2010, about 2 percentage points higher than that in 2007, according to a survey by education research company MyCOS Institute released Thursday.

Some 227,000 college graduates were interviewed for the survey six months after they graduated last year.

In breakdown, 91.2 percent of the university graduates and 88.1 percent of the graduates from junior colleges and higher vocational schools found jobs within six months of graduation, according to the survey.

Meanwhile, college graduates' average monthly starting salary was 2,479 yuan (381.4 U.S.dollars) in 2010, 349 yuan higher than the starting salary of those who graduated in 2009, MyCOS said, attributing the rise to rising demand for skilled workers.

The survey also covered some 109,500 employees who graduated from college in 2007. Their average monthly income had reached 4,388 yuan, more than double what they earned three years ago when first interviewed by MyCOS.

China's eastern and costal regions were still the most attractive places to work for college graduates, with Beijing, Shanghai and Guangzhou as the most appealing cities, according to the survey.

But among those who graduated in 2007, more than 20 percent of them had left the three cities within three years of graduation, it said.

About 60 percent of the interviewees who graduated last year thought their jobs did not match their expectations.

Some 36 percent of these graduates regarded their positions as "inconsistent" with their career plan, while 22 percent of them said the work failed to match their interests.

Jobs not matching career plans was a salient reason why 34 percent of these graduates left their positions within six months of graduation, said MyCOS.

More graduates are starting their own businesses after graduation, with 1.5 percent of graduates becoming self-employed in 2010. Most of the graduates' start-up funding came from parents, relatives, friends and personal savings, according to the survey.

"A total of 593,832 foreigners were living on the Chinese mainland at the end of 2010, data from the sixth national census reveals. The top three home countries of the foreigners were South Korea, the United States and Japan. Among the foreigners living on the mainland, 56.62 percent or 336,245 were males and 43.38 percent or 257,587 were females. Foreigners on the mainland were surveyed for the first time in the census. A total of 234,829 Hong Kong residents and 21,201 Macau residents were living on the mainland in November, the census results showed. Among those Hong Hong residents living on the mainland, 141,321or 60.18 percent were males. Males accounted for 55.22 percent, or 11,708, of the total number of Macau residents living on the Chinese mainland, the census found. And a total of 170,283 Taiwan residents were living on the mainland in November. Of them, 116,547 people or 68.4 percent were males." [Shanghai Daily]

About three quarters of companies operating in China expect to increase wages by over 5% in 2011, a survey by British recruitment firm showed on Wednesday.

The finding comes amid a boom in China's middle class, a result of the country's economic success, and highlights the high inflationary pressures in the pipeline as well as rising costs faced by many companies.

Most companies in China to hike wages in '11: Survey

Chinese employees "are now in a stronger position than they were previously. They have a much better understanding of their worth in the market place and are aware of their bargaining power," said Nigel Heap, managing director of Hays Asia Pacific.

The annual salary survey of more than 5,000 employers based in Shanghai and Beijing showed more than half expect to increase salaries between 6-10% over the next 12 months while a third intend to hike them by more than 10%.

Wage inflation is being propelled by fast economic growth in smaller or so-called tier-two cities, which has given hundreds of millions of migrant workers the option to return home where the cost of living is cheaper, Heap said.

Labour demand has risen significantly in tier-two cities following massive investments by the government in the past two years to develop inland areas, he said.

Rising wages put pressure on inflation although that is being compensated for by even faster gains in productivity for now. Data showed on Tuesday core inflation, stripped of volatile food prices, jumped to its highest in at least a decade in January.

Still, the Chinese government is encouraging wage hikes as it wants to boost consumer spending and reduce the economy's reliance on exports.

In January, the city of Beijing raised the minimum wage by 21% while Shanghai's mayor has said he plans to raise it by more than 10% this year given the fast pace of development and soaring food prices.

Guangdong province, the mainland's manufacturing hub, will reportedly raise its minimum wage by an average 18.6% from March.

Multinationals operating in China such as Yum Brands Inc have already seen commodity-induced cost inflation eat into their profit margins.

The owner of the KFC, Pizza Hut and Taco Bell fast-food chains forecast this month rising 2011 labour and food costs in China and said that modestly raising prices in its top growth market would help mitigate that pressure.

To check companies reported violation of rules to require hepatitis B tests for job applicants, the Chinese Government has reiterated a strict ban on the tests during pre-employment physical examinations.

China's Ministry of Health said that no health institutions are allowed to provide hepatitis B checks as part of pre-employment physical tests regardless of whether the examinees provide consent or not.

On Feb. 10, 2010, the Ministry of Health, the Ministry of Education and the Ministry of Human Resources and Social Security jointly issued a circular demanding the cancellation of the hepatitis B tests during the health checks for school enrollment and employment nationwide, Xinhua reports.

However, according to a survey released this week, which was conducted by the non-profit Beijing Yirenping Center, some 61.1 percent of the 180 state-run companies surveyed included hepatitis B checks in their pre-employment physical examinations.

More surprisingly, 63 companies said that they would never consider hepatitis B carriers for a job or were reluctant to hire such people.

Yu Fangqiang, the principal of the Yirenping Center, said that such violations mainly resulted from light punishment for violations and some health institutions' desire for profits.

Source-ANI

IN the past weeks, I've joined several Christmas parties in Berlin, but what I am really longing for is coming back to Shanghai and celebrating the Chinese New Year with my parents. I need a short break from my doctoral thesis in Berlin.

I have been asked so many times by both Chinese and German friends about the plan after achieving the doctoral title in Germany, to stay or to return. I have never hesitated to answer - I will go back to Shanghai. Definitely! Home is sweet.

But what if home is not always sweet? I was surprised when my German supervisor at the Humboldt University of Berlin once seriously suggested that I might need two to three years to get readjusted in Shanghai. But how can this be true? I was born and grew up in this metropolis, and everything in Shanghai is familiar to me. I first just regarded this as a joke, but later I asked myself, is the process of readjusting to Shanghai that easy?

Nan M. Sussman, a renowned American professor, focusing on exploring cultural transitions among sojourners, wrote an article, The Dynamic Nature of Cultural Identity Throughout Cultural Transitions: Why Home Is Not So Sweet, in which she analyzed the relationships among self-concept, cultural identity, and cultural transitions.

The well-known U-curve hypothesis vividly depicts the process of acculturation in a new culture as a curve with four-stages (honeymoon, conflict, critical, and recovery). Later, the return into the home culture is suggested as another U-curve and the whole process of cultural transition was described as a W-curve.

Frankly, I did expect the cultural difference before I left Shanghai for Berlin, but it is frustrating to imagine that I even need to prepare for another round of cultural shock to my own culture.

Nevertheless, on second thought, it is logical and reasonable that one should never take the readjustment for granted, as home is never the same home it once was and the person himself is never the one he once was. Everything at home changes, more or less, during one's absences. One cannot step into the same river twice, for fresh water is forever flowing towards him. The better one has adapted to the foreign culture, the more difficulties one will come across when he returns to his own culture.

Pressure to succeed

Then, what I am worrying about in going home? Definitely, it is the high social pressure on and expectations of young people. We are all familiar with the standards of "successful" young professionals in Shanghai, who are expected to have a "white-collar" job, to purchase an apartment of his own (a bonus if it is downtown), to own a car and to be able to afford a "golden-week" holiday abroad (in Europe or in Japan) once a year. I am sure I will be excluded from this "promising" group when I come back to Shanghai.

Clothes and trappings make the man in Shanghai. I always turned off the tone of my old mobile phone, as my old-fashioned one made a monotonous noise when someone called me; people around me on a bus would cast their eyes upon me, wondering how could I, being a young people in such an information era, be that out-dated. I didn't bother to purchase a new one and just switched the ring tones off, to avoid the peculiar eyes.

In Berlin, old-mode mobile phones are sometimes still seen and one doesn't necessarily have to feel ashamed for only owing an old-fashioned one. Believe it or not, the new interior decorations of my friends or former classmates in Shanghai are more luxurious than that of most German families I have visited.

Cultural transition is challenging and demanding. As a sojourner, I both suffered and benefited tremendously from various cultural shocks in Berlin. When I finally get used to the German language, culture and lifestyle in Germany, it is time to return, and I am actually more than happy to return.

But how shall I encourage myself to be brave and determined? Maybe one of the easy alternatives is not bother to think too much, but when in Shanghai as the Shanghainese do?

Home may still be sweet as we thought, who knows?

Author:Zhu Jiani

HONG KONG (MarketWatch) -- Chinese companies plan to pay out larger discretionary 2010 year-end bonuses, as a percentage of base salary, than companies in Hong Kong or Singapore, according a quarterly survey released Thursday by recruitment firm Hudson. About 20% of China companies surveyed will pay bonuses equivalent to 20% or more of base salary, while only 16% of firms surveyed in Hong Kong, and 15% of Singaporean companies will be as generous. China companies also outpace their counterparts in terms of the percentage planning any sort of bonus packets, with 92% of companies to offer the payouts, compared to 87% in Singapore and 82% in Hong Kong, the report said.

A total of 57 million jobs will have been created in China's urban areas over the 2006-2010 period, the Minister of Human Resources and Social Security (MHRSS) Yin Weimin said Thursday.

Annual employment for the period will be 11.4 million, or 2.1 million more than China's 10th Five-Year Program (2001-2005) period, said Yin while addressing a national human resources and social security work conference.

Yin said the unemployment rate had remained under 4.3 percent throughout the period, while nearly 45 million underemployed rural workers had taken up new jobs in the non-agricultural sectors, 5 million more than the 2001-2005 period.

The Employment Promotion Law of 2007 as well as measures introduced after several natural disasters and the global financial crisis had boosted employment, Yin said.

Also, a system providing vocational training and employment services was taking shape, he said.

About 86 million people received special vocational training and 330 million people used government employment services during the period, he added.

Chinese Vice Premier Zhang Dejiang said at the national conference on human resources and social security that China needed to resolutely stick to the task of creating jobs and keep improving the social security system during the coming 12th Five-Year-Plan period (2011-2015).

In the next five years, the government should implement more effective employment measures and create jobs through diversified channels, Zhang said .

Zhang also said the government should increase investment in the social security network and expand the network's coverage so to improve the country's social security system for both rural and urban residents.

On CBS' 60 Minutes last Sunday, the Brazilian billionaire Eike Batista told correspondent Steve Kroft that he's hiring Americans to weld his oil platforms.

"To weld the platforms?" Kroft responded incredulously. "Yes," replied Batista, explaining that his country's booming economy is at almost full employment, and Brazil needs to import workers. "Already we have created this year 1.5 million jobs," continued the world's eighth richest man according to Forbes' most recent tally. "It's unbelievable."

That unbelievable job growth is reflected in the latest global employment outlook survey by the staffing firm Manpower. Brazil rates fourth on the tally of the nations with the greatest optimism about hiring in the first quarter of next year. Brazil's net hiring outlook--the number of employers surveyed who expect to increase their employment rolls minus the percentage who expect to decrease them--is 36%. That's driven by a 7% gross domestic product growth rate, three times higher than in the U.S.

Manpower surveyed 64,000 human resource directors and senior hiring managers from public and private concerns worldwide to come up with its list. It asked each of them about their expectations for hiring in the first quarter of 2011. Almost half, 47% of them, came from 10 countries in the Americas, 24% from eight countries in Asia and the Pacific, and 29% from Europe, the Middle East and Africa. "This is very much a macro-economic look at new job creation," says the staffing firm's chairman and chief executive, Jeffrey Joerres.

The results are striking, if not surprising. India has pulled ahead of China since last quarter to take first place, with a whopping 42% net hiring outlook for the first quarter of 2011. China follows close behind at 40%, a 2% decrease from last quarter. Taiwan comes in third, with a net employment outlook of 37%.

Next in line, after Brazil: Turkey, at 27%."There are 75 million people in Turkey," Joerres notes, "more than people realize." And so, despite a lingering debt overhang, there are plenty of consumers buying stuff and driving growth and hiring. Next up after Turkey: Singapore, with a net hiring outlook of 26% for the first quarter.

Are these new jobs ones that should prompt Americans to consider moving? Possibly, says Joerres, though much of the demand gets filled by people from neighboring countries. Outfits like Manpower, which has offices in 82 countries, and the plethora of online job listings make the international job market ever more transparent.

While many of the openings are for low-paying jobs, there are also plenty of opportunities for highly qualified professionals, especially in fields like geoengineering and information systems, Joerres says. Oil and gas engineers are in high demand, for instance. That's a minority of the workers who relocate internationally for jobs, he adds, but it's a minority that's growing: "It's still on the margin, but the margin has gotten bigger."

The countries rounding out the list include Peru, Costa Rica and Argentina as well as Australia and Hong Kong.

How does the U.S. rate? Better than you might expect. It has a 9% net hiring outlook.

By Robert Parkinson

2010 has seen the rate of professional level hiring in China rapidly accelerate and those in the recruiting and HR community can now really feel the pressure to find the right candidates starting to mount: MNC/Fortune 500 and SME led expansion held back during the economic turbulence of 2009 has resumed and the number of companies hiring in substantial volumes (more than 100 heads) has dramatically increased as companies seek to make the most of the anticipated 5-7+ years of economic buoyancy in China.

So which industries are particularly active?

RMG Selection's clients in the luxury goods sector, for example, are hiring extremely aggressively: A well known French luxury brand has seen their factories in France stretched to capacity, largely to fulfill demand from Asia, and specifically, China. There are such high levels of disposable income, in Beijing for example (a city now with the highest number of billionaires in the world) that there is even list-price demand for display models of 'big ticket' items such as $500k+ cars. This spending has been fueled particularly after the recent changes in the regulations governing the sale and purchase of real-estate. RMG Selection has seen highly competitive hiring in the luxury goods sector both from overseas and with firms poaching talent from direct competitors and other businesses with suitably skilled talent in China. A luxury handbag maker recently hired a senior-commercial executive from a major hotel chain. This is an example of movements from one luxury segment to another because of the lack of available talent.

In the mid-market consumer goods segment, car makers can not keep pace with demand for new cars, with many of these firms investing heavily in further expansion. Key areas of HR growth include manufacturing-oriented hiring as well as support functions such as training and network development.

In the professional services sectors such as banking, finance, and the law many areas have seen very strong growth through 2010 too, particularly those supporting the large number of initial public offerings of Chinese companies in Hong Kong.

Sales & Marketing: as firms continue to boost investment in increased capacity and support, the pressure (particularly from the Global HQ) to see a rapid return on this investment is ever present. The competition for high quality Sales & Marketing professionals is therefore fierce in a market which is generally felt to lack sales & marketing talent and leadership.

For Yukimasa Uchida, managing director of the Japanese arm of the Boston Consulting Group, a recent recruiting trip to sift the best and the brightest among China's top graduates was a revelation.

"It was like striking a gold mine," Uchida said of the job fair.

His company had attended the event expecting to make job offers to two or three students, but only if it could find people of the right quality.

"We have already made job offers to six students in Beijing and Shanghai together," he said. "We may hire some more."

He was not alone among Japanese recruiters in being impressed by the quality of applicants at the event, held in Beijing and Shanghai between Nov. 3-6.

The fair, organized by Recruit Co., a leading job placement agency in Japan, drew about 10,000 students from 39 universities, including the elite Peking and Tsinghua universities in the capital and Fudan University in Shanghai. Of these students, only about 1,000 college seniors were selected for interviews by the prospective Japanese employers, after a vocational aptitude test and preliminary interviews.

For successful applicants, the potential rewards on offer were mouthwatering. Although Japanese businesses have been hiring in China for years, the 22 companies at the fair were hiring people to career-track positions in their Japanese headquarters, rather than jobs at China-based affiliate companies.

That usually means much higher pay and chances for promotion. The companies included major names such as Sumitomo Mitsui Banking Corp., Mizuho Financial Group Inc., Kirin Brewery Co. and Konica Minolta Holdings Inc.

Like Uchida, Noriya Fukumoto, personnel manager of the toymaker Tomy Co., was bowled over by the caliber of the students he encountered.

"They are brilliant," Fukumoto said. "They have a clear vision of their career path and have a strong drive, compared with Japanese students."

Tomy offered jobs to three applicants, one more than it had anticipated. It plans to recruit foreigners to half of its new positions for college graduates in future.

Boston Consulting Group had been hiring between 10 and 20 graduates a year from Japanese colleges, including graduates of the University of Tokyo, Keio University and other big-name schools.

"Most job applicants were inclined to value stability," Uchida said. "There were fewer combative candidates, like soldiers of fortune."

In China, its recruiters were finding ambitious and go-getting personalities, he said, "the type we greatly favor."

The company did not make Japanese language skills a requirement for the recruits at the interview, taking the view that they can learn Japanese after getting a job offer. They all spoke English competently, although most of them had never been abroad.

Junichi Ito, the organizer of the fair at Recruit's Shanghai unit, said the large number of top-quality applicants had been attracted because Japanese businesses were offering positions on the payrolls of their Japan-based operations.

"Japanese affiliates in China have found it hard to secure top-class personnel because their pay is lower than that of U.S. and European counterparts," Ito said. Another obstacle has been a perception that local hires cannot reach the top echelons of corporate hierarchies.

The companies at the fair paid 1 million yen ($12,000) each to take part and were required to pay 1.1 million yen for each new recruit. In return, they got access to the cream of the more than 6 million people who graduate from Chinese colleges each year.

A 22-year-old senior who majors in Japanese at Fudan University said getting on the payroll of a Japanese company's head office was key.

"While a monthly salary at a Japanese affiliate in China is about 3,000 yuan (about 37,000 yen), the starting salary in Japan is about 200,000 yen. There is no comparison," she said.

The promise of working overseas and of greater responsibilities at head office made the positions on offer at the fair very attractive, she said. "Many of my classmates are going to work in the United States and Britain," she said. "I want to work abroad, too."

Xu Shuang, 21, a Japanese major at Tongji University in Shanghai who is studying international economy at Fudan University on weekends, said he had been interviewed by a Japanese bank. The enthusiasm of the Japanese for hiring foreigners was evident, he said. "Japan's corporate culture will be changing."

The targeting of Chinese talent by Japanese businesses is not limited to the graduate market. China's state-run Shanghai Foreign Service Co. and the Japan-based companies A-commerce Inc. and Global Power Co. formed a tie-up in October to target mid-career Chinese personnel.

They plan to hold a presentation for about 50 Japanese companies in Shanghai by the end of the year and have 500 Japanese organizations signed up within three years. Their service will include introducing Chinese personnel in white-collar jobs at foreign-affiliated companies in China to Japanese companies' main offices in Japan.

Yoshikazu Akiba of A-commerce said Chinese workers, who used to prefer working for U.S. and European companies, were showing more caution since the collapse of Lehman Brothers in autumn 2008.

"A Japanese company that emphasizes job security is greatly appreciated," Akiba said.

Meanwhile, Japanese companies wanting to expand their operations in China are viewing Chinese personnel as critical to the success of their marketing strategies.

"Sales pitches by Japanese staff in China have their limits," an official with a major food company said. "We would like talented Chinese personnel to acquire our corporate culture while working at our main office and then to take the charge of developing new markets in China."

One alleged drawback of hiring Chinese graduates is their penchant for switching jobs, but Uchida at Boston Consulting Group said this was not an issue.

"Many Japanese elite graduates who are not very ambitious types quit in two or three years," he said. "Whether or not Chinese staff stay on depends on their employer."

With the ratio of Japanese college seniors securing job offers hitting a record low 57.6 percent this year, the once remote prospect of competing with foreigners for prized positions at Japanese head offices is now a reality. Fukumoto at Tomy put it baldly: "If we employ more Chinese, that means we have fewer slots for Japanese."

For Uchida, that might not be a bad thing: 'If (recruitment of more foreign personnel) wakes Japanese students and employees to global competition, it would be a success," he said.

(This article was written by Atsushi Okudera and Tokuhiko Saito.)

The economy's twin engines, the Yangtze and Pearl river deltas, are spluttering due to a shortfall of migrant workers, especially in the service and manufacturing industries, amid soaring living costs and stagnant salaries.

"The labor shortage has hit customer services and the home service sectors since spring, and it is becoming more serious recently," said Chen Qian, the manager of a downtown employment agency in Shanghai.

"On average, up to 40 percent of job vacancies in these sectors have not been filled."

According to the latest statistics from the Shanghai Restaurants Association, the shortfall in waitresses currently stands at 20 percent and will double during the Spring Festival period, which falls in early February next year.

"Up to 80 percent of the 40,000 restaurants in the city have been regularly running recruitment notices this year as demand for labor has been much higher than supply," said a male staff member, surnamed Xia, from the association's marketing department.

In order to fill the huge shortage in the customer services sector, many restaurants have to employ part-time workers from universities or previously unpopular middle-aged workers from rural areas in other provinces.

"As more and more migrant workers were born in the 1990s, they are more picky on salaries and work conditions, and it is extremely difficult to find enough hands ahead of the Spring Festival," said Shen Xiaoyan, restaurant supervisor of South Beauty, on Ziyun Road in Shanghai.

Migrant workers make up 95 percent of the workforce of the company, which owns more than 10 restaurants in Shanghai. It has dozens of unfilled vacancies, she said.

Shen added that the restaurant had removed the age-limit requirement for job applicants so that it could employ middle-aged workers and college students.

The main reason for the severe labor shortage is the soaring cost of living coupled with stagnant income growth, experts said.

The average monthly salary for an employee in the service sector in Shanghai is about 1,300 yuan ($197), barely enough to cover food costs.

"That has prompted more migrant workers to choose to stay in their hometowns, where they earn a bit lower but also spend less on living costs," said Zhang Zhenning, a senior HR consultant based in Shanghai.

In South China's Pearl River Delta region, labor shortages have already affected companies' expansion plans.

"Some companies have to give up orders because of worker shortages," according to sources with the Guangdong provincial department of human resources.

The Christmas and New Year periods are usually the busiest for production in the Peal River Delta.

The worker shortfall has been estimated at more than 900,000, according to a recent survey by the province's human resources department.

The delta's major cities of Guangzhou, Shenzhen and Dongguan are experiencing a combined shortfall of about 550,000 workers, according to the survey.

Labor-intensive industries such as garments, shoes, toys, textiles, construction, sales and catering are facing an even worse situation in employing new staff, sources said.

Some factory owners in the Pearl River Delta have been forced to move their production centers to inland regions, where most migrant workers come from.

"I've already moved two main workshops from Dongguan to rural areas in Hunan and Guangdong provinces, as more migrant workers prefer staying in their hometowns to lower expenses," said Michele Wang, the owner of Dongguan Michele Lingerie Co Ltd.

To address the challenge, Guangdong provincial authorities have raised the minimum salary several times over the past months and lowered the threshold for migrant workers to get the local hukou, or household registration.

Chen Renjun, an official with the Haifu Job Center in Huizhou, a city in Guangdong, said the number of people seeking work at his center has dropped more than 20 percent in the past month from the same period last year.

The situation will be even worse for employers in the first quarter of 2011 as migrant workers leave the city for the lunar new year, he said.

Liu Kaiming, director of the Shenzhen-based Institute of Contemporary Observation, said the labor shortage will continue to exist in Guangdong for years.

"The labor shortage, however, will help coastal areas upgrade their industrial structure," Liu said.

Ni Jiasheng, 23, a migrant worker from Hunan province, said the labor shortage is actually good news for migrant workers.

"We can now have more choices (in seeking employers)," he said.

Source:China Daily

The hiring rate for professional or managerial level positions in China is second highest in the world behind Thailand, according to a report from a leading British staffing firm.

Of the 3,000 Chinese firms polled in October, 81 percent said they planned new hiring in the third quarter, up from 72 percent last quarter.

The November report, from London-based Antal International Ltd, revealed most new positions in China will be in banking, pharmaceutical, manufacturing and professional service sectors.

The company's October survey polled some 3,000 companies in China and over 9,000 worldwide, Li Zhe, a public relation's official with the company, said Tuesday.

China hiring is up on the nation's strong economic growth.

"The Chinese government has done a good job helping China rebound from the economic crisis, which has brought a real recovery for the Chinese economy," said James Darlington, the company's Asia chief.

China's huge domestic market is the driving force behind all the new hiring and also helps explain why many international companies, for example in the pharmaceutical sector, are now expanding their production bases and constructing research and development facilities in China, Antal's Darlington said.

The Asia-Pacific region, where 77 percent of organizations polled are hiring at the professional or managerial level, has been the most active hiring region in the world, according to the research.

Brazil has also reported hiring demand is up, with 70 percent of those polled planning to bring on new staff in the third quarter.

Globally, the sectors with the highest levels of recruitment are in healthcare, renewable energy, biotechnology, retail and professional services.

On a different note, the report also showed which industries are shedding employees, and in China the banking industry is axing the largest number of staff.

According to Antal International Ltd's Darlington, this is a positive sign for the industry as the upgrading of talent demonstrates the dynamics of the sector.

While the world financial crisis is still not over, Darlington concluded that a slow but steady recovery has been demonstrated in the professional and managerial jobs market since 2009 — especially in China.

Fund managers in China are switching jobs too frequently. That has led to concerns about the asset management companies’ ability to retain key portfolio personnel and ultimately deliver performance.

Around 148 fund managers have switched or quit their jobs so far this year compared with 85 people in the same period last year, according to Wind Info, a Shanghai-based financial data provider.

Wind Info says only three fund managers in China have more than 10 years of experience in the same company.

“In the US, the average working life for a fund manager is 4.8 to 4.9 years. In China, it is only 1.68 years,” says Vivian Lee, a fund researcher of Galaxy Securities in Beijing.

More and more fund managers are moving from public to private funds. One recent example is Mo Tai Shan. Last week, the ex-general manager of the Bank of Communications Schroder Fund Management moved to Chongyang Investment Management, the largest private hedge fund in China.

Public funds in China target retail investors in the same way that mutual funds do elsewhere. Private funds, meanwhile, target wealthy or institutional investors with a higher investment and risk threshold.

Fund managers are in short supply, so it is common for one manager to run more than one fund. For instance, Lu Zhigang, the former fund manager of Yin Hua Fund Management, controlled three fund products before he left the company this month.

“Here is the regular pattern: fund companies first post recruitment announcements, then the fund managers’ leaving announcements are likely to follow,” says a source from the marketing department of a fund house in Shanghai.

There are several reasons for the high turnover of fund managers in China.

First, the unsophisticated assessment system and poor incentive structure of public funds has made it challenging to retain managers. Many fund houses use the ranking of funds as a big indicator to judge a manager’s performance. However, this is not in line with the concept of “value investment” they put forward. Some fund companies even attempt to draw investors’ attention to new managers in the hope this will increase sales.

“Everything is based on the fund rankings here,” says a source from a fund house in Shanghai. “Investors select funds by their rankings and fund houses judge your [fund manager] performance also by the rankings. We do need a benchmark for comparing the performance of different funds, not just merely relying on the rate of return.”

Second, public fund managers have less investment flexibility, being subject to restrictions such as position limits and on asset allocation. “Fund managers want to be free from these restrictions,” says Jonathan Ha, director for advisory service at Shanghai-based consulting firm Z-Ben Advisors. He adds that good incentives and compensation from private fund houses are attractive to fund managers.

Third, poor portfolio performance forces fund managers to resign. According to Wind Info, by the end of May this year, the average growth rate of the 350 equities funds that it tracks in China was -12.72 per cent, with 54 funds down more than 20 per cent and only 12 funds turning in a profit.

To solve the problem of this high turnover, more and more fund companies tend to apply a “two fund manager” system, which means having one “old” or existing manager plus a new manager. This is also what The China Securities Regulatory Commission expects funds to do, according to analysts.

Wen Qun, an analyst at TX Investment Consulting in Beijing, says the problem will not be solved in the short term. “The fund industry in China has been developing quickly in recent years. It is inevitable the fund houses will face staff shortages,” says Mr Wen.

By Glori Ye

By Connie Johnson Hambley

Bingbing Feng and Chip Carnathan have a lot in common. Both men are pharmaceutical professionals with doctorates from U.S. universities, multiple years of experience with American biotechnology and pharmaceutical companies, and families in the U.S. Each thinks his best career move would be to work in China next.

The pharmaceutical and drug-development business is changing globally, with unavoidable effects on the lives of professionals. The past three years have seen big pharmaceutical companies laying off tens of thousands of highly educated, trained scientists and the U.S. is not creating jobs fast enough to absorb the talent. In tandem with this decline has been an intense push by China to create companies and jobs in the life science sector. As more work is outsourced to China, less is performed in the U.S. Being jobless in the U.S. for a year or more is not uncommon, so China is poised to be the largest beneficiary of a global talent shift.

In 2007 the report "Globalization of Innovation: Pharmaceuticals," co-authored by Vivek Wadhwa, a senior research associate at Harvard Law School, noted that 5 of the world's top 10 pharmaceutical companies were based in the U.S., although the country's standing was threatened. "Cost pressures, the need to tap global talent, and growth opportunities in emerging markets have prompted Western pharmaceutical companies to shift substantial manufacturing and clinical-trial work to India and China," the report stated. "Increasingly these companies are turning to Asia to broaden the range of new drug candidates."

The intellectual processes of innovation and creativity, often called scientific rigor, hold the key to pharmaceutical success. After scientists present research to peers and superiors, a dynamic dialogue questions and critiques the work, requiring the scientists to push back with rebuttals. Such vigorous sessions are the hallmark of Western research and development culture. Scientists trained to "push back" are in demand -- just not so much in the U.S. According to the National Science Board's Science and Engineering Indicators, U.S. institutions granted 41,000 science and engineering PhDs in 2007, a third of them to foreign students. The SEI report notes that "recent growth in R&D expenditures has been most dramatic in China, averaging just above 19 percent annually in inflation-adjusted dollars over the past decade," compared with just a 3.3 percent increase in the U.S.

People who were born abroad, obtain educational and work experience in the U.S., and then go back to their homelands are referred to as "returnees." "Availability of talent and human capital continues to be a significant concern" to expanding companies, stated the globalization report. While Indian and Chinese returnees are "available today in greater numbers than in years past, many [local] pharmaceutical employees have limited experience with drug-discovery culture."

"In China it's harder for people to express themselves voluntarily. They are trained from elementary school to compete for No. 1 so that no one can beat you," says Mei-Shu Shih, a returnee who serves as chief scientific officer of PharmaLegacy Laboratories, a contract research organization based in Shanghai. "In the United States the mentality in the corporations is to push for scientists to be team players." Shih says that once team spirit is cultivated in a group of native Chinese scientists, they open up and become "quite brilliant." Still, he notes, a cultural reticence to speak up can be difficult to overcome.
The push for Western-trained scientists has begun. Cliff Hegan, managing director of Fitco-Consulting, an executive recruiting firm based in Shanghai and Singapore, says that "Western research-and-discovery technology is more scientifically advanced. Chinese-trained scientists are more application-centered and therefore less technically advanced and innovative in their thinking." Pharmaceutical companies want U.S. trained managers because of their entrepreneurial spirit and creative problem solving skills, in contrast to the more linear, pragmatic, approach of their Asian counterparts. The cultural divide is creating opportunities.

Language is typically not a barrier for a Western scientist seeking to enter the Chinese job market, especially at senior levels. Companies are often willing to provide Mandarin tutors to ease the transition. And because most senior and middle managers in China received essential scientific training in the U.S., they tend to speak English, with young PhDs surprisingly fluent. "Most scientists are surprised when they walk into a lab in Beijing and sit down and interact with a team. Often they see former colleagues and it feels quite like a biotech in Cambridge," where easily 25 percent of the scientists are Chinese, says John Oyler, a serial entrepreneur and graduate of MIT and Stanford who is starting a cancer research company in Beijing. "It is early here and there is still room for many more talented, Western-trained, research-and-discovery professionals in Beijing."

Oyler moved to Beijing in 2005 to start BioDuro, a contract research organization that was sold to Pharmaceutical Product Development, a leading global research contractor focused on drug discovery, development, and life-cycle-management services in 2009. "Most people thought I was crazy to move to China. But the move was obvious," he said. "There are top academic institutions here -- unequalled by any city other than Boston -- talented and hardworking professionals with great minds, and deep financial support from the Beijing government." Oyler says it was easy to create a vibrant life because of the energy and close-knit nature of the industry in China.

Some companies prefer candidates fluent in both languages and familiar with both cultures. Bingbing Feng exemplifies this point. "A returnee brings knowledge and experience that a local Chinese does not," he says. Born and raised in Beijing, Feng moved to the U.S. at 22 to continue his scientific education. He received his doctorate from Purdue in 1997 and then worked in Pennsylvania for GlaxoSmithKline (GSK). "The expectations are much higher for a returnee," he said. "We are expected to bring more to our job and deliver more than a local Chinese." Open to working in the U.S. or China, Feng says China offers "more opportunities as it's building up the industry."

Dr. Jisong Cui, director at Merck Research Laboratories and president of the Sino-American Pharmaceutical Professionals Assn., admits that heritage is coaxing some of her friends back to Asia. Most return, she says, because they consider the career options to be better in China. Since her organization was created in 1993, in part to promote scientific exchange between the U.S. and China, SAPA has grown to more than 4,000 members. Cui estimates that 1,000 U.S.-based members have already returned to China. Indeed, Merck is moving its external research and clinical services work to China to take advantage of current trends.

Carnathan, who has worked in drug development and global regulatory affairs, says he would tell his sons to "jump at the chance to work in China" and would himself follow that advice if he were to receive an offer there. "China is the next wave of business innovation and growth and to be there at the beginning of the upswing is even better," Carnathan says.

According to the Manpower Employment Outlook Survey results released today by Manpower Inc. (NYSE: MAN), hiring expectations in emerging markets -- China, Taiwan, India and Brazil -- continue to outpace the rest of the world. Meanwhile, employer hiring confidence in European countries is mixed with positive job prospects reported in Germany for the quarter ahead. And although hiring plans in the U.S. are stronger compared to one year ago, the cautiously optimistic hiring pace reported for the next three months indicates economic concerns continue to weigh on the minds of American employers.

"We're seeing a multi-speed recovery in the global labor market with talent demand in high gear in many of the emerging markets we survey. Other markets, such as the U.S. and Japan, are still moving forward but can't seem to get out of first gear," said Jeffrey A. Joerres, Chairman and CEO of Manpower Inc. "Employers in many markets continue to struggle with inconsistent demand for their products and services making it difficult to anticipate staff needs. As a result, a flexible workforce strategy will be critical during this point of the recovery cycle."

The Manpower data shows employers in 28 of 36 countries and territories expect positive hiring activity in the fourth quarter, with those in five reporting negative hiring expectations -- an improvement in comparison to the 12 countries reporting negative outlooks 12 months ago. Globally, employers in 32 countries and territories are reporting stronger year-over-year outlooks, with those in China, Taiwan, India and Brazil indicating the strongest fourth-quarter job prospects. Notably, forecasts from Chinese, Swiss and Taiwanese employers are the most optimistic since Manpower began polling there. The weakest hiring plans for the upcoming quarter are reported in Greece, Italy, the Czech Republic, Spain and Ireland.

Across the Asia Pacific region, year-over-year forecasts improve in each of the eight countries and territories surveyed, with forecasts improving from the third quarter in three. Hiring plans in the region are strongest in China, Taiwan and India. Meanwhile, employer hiring plans in Japan are the most conservative in the region, but they are considerably stronger compared to one year ago.

"Continued strong domestic growth is fueling stronger job prospects in all industry sectors in China and Taiwan from three months ago. As a result, the talent wars are waging again as companies struggle to retain the talent they need," said Joerres. "In contrast, Indian employers expect to ease the pace of hiring slightly. Interestingly, our data reveals a bright spot in the Japanese Manufacturing sector, where hiring expectations have improved for six consecutive quarters and are the strongest in two years."

Similar to the third quarter, fourth-quarter hiring expectations remain mixed in the 18 countries surveyed in the Europe, Middle East and Africa (EMEA) region. Employers are reporting positive Net Employment Outlooks in 10 countries, but those in 11 expect the pace of hiring to soften from three months ago. However, the year-over-year comparison is more positive with improved Outlooks reported in 15 of 18 countries. Hiring activity in the region is expected to be strongest in Switzerland, Norway and Poland and weakest in Greece and Italy.

"European labor markets have yet to gain real traction due in part to the uncertainty in Greece and Italy. But we are seeing notable improvements across the region in the Finance and Business Services sector, where year-over-year forecasts improve in 15 countries, most notably in Switzerland, Germany and Norway," said Joerres. "The German labor market continues to be resilient; however lack of talent, especially engineers, healthcare professionals and sales staff, is becoming a real issue for employers in many sectors."

Across the 10 countries surveyed in the Americas region, employers anticipate varying degrees of positive hiring activity. Outlooks improve in six countries from three months ago, but improve in all countries when year-over-year comparisons are made. Regional hiring plans are again strongest in Brazil, Peru and Costa Rica and weakest in the U.S., where hiring plans are relatively stable from three months ago but are notably stronger than those reported one year ago.

"Hiring confidence has returned to the majority of the region with employers in Brazil, Canada, Mexico, Panama and Colombia reporting their most optimistic plans of the year," said Joerres. "Brazilian employers in the Services sector continue to create jobs at a rapid pace and in many industry sectors wage arbitrage is becoming an issue for both professional and skilled trades roles. Meanwhile, in the U.S. most of the hiring that was done in the third quarter will be absorbed, yet negative outlooks are reported for just two sectors -- Construction and Government. U.S. job seekers can expect to find the most opportunities in the Wholesale & Retail Trade and Mining sectors in the quarter ahead."

By Chris Devonshire-Ellis and Richard Hoffmann

Aug. 27 – A recurring theme over the past two years for expatriates wanting to be based in China is the subject of possessing a criminal record. These may of course be for relatively minor offenses; however China’s policy in this regard can be strict.

A standard requirement (although it is not always requested) for expatriates looking to work in China is for a “Certificate of No Criminal Record” to be provided when applying for a work permit. This is a particularly strict requirement in Shenzhen and Guangzhou, though less so in Beijing and Tianjin. Providing this certificate means having to go to your local police station in your home country and obtaining one. Different countries have different systems for providing such a document, and some smaller countries can even issue this from their embassy in Beijing. For most expatriates seeking employment in China, however, this needs to be obtained from their local police authority in their home country.

The same also applies to having a criminal record in China. However, criminal records are not usually recorded in China on a national basis. Therefore, it may be possible if in possession of a criminal record in China – if the authorities have not already deported you – to apply successfully for such a work permit in a different region of China. The best advice is of course to not commit criminal acts in China. You risk your job, simple as that.

A little known aspect of China’s laws also criminalizes debts of over RMB10,000. That means that if a foreign invested company has become insolvent or bankrupt, unless the debts, including all staff obligations, taxes due and so on are met by the parent company, expatriates simply walking away from the situation risk being found guilty in absentia. This is of particular pertinence to the chief representative or legally responsible person. In these positions, the title means exactly what it says – responsible for the activities of the company, including its debts.

People can be incarcerated for long periods over debts incurred by their company in China. Returning to China knowing that you have such a background then is unwise. Expatriates’ personal data is now shared on a national basis, and even if one manages to apply for a work permit in a different city, a sharp-eyed clerk somewhere may mean a knock on the door sometime later.

The lesson for all expatriates in China is to pay your debts, and keep out of trouble. You may not get a second chance.

Foreign-invested companies in China facing significant problems in which closure becomes necessary must take the appropriate actions when doing so. Leaving China with unauthorized debt places you at significant future risk should you wish to later re-enter the China market. It is far better to negotiate with creditors than face prosecution. Most of the obligations under such circumstances can be dealt with through negotiation, and require the provision for creditors meetings. Although unpleasant, these do allow for the company to state its position firmly, abide by the rules, and decrease the amount of outstanding debt. While creditors can usually be dealt with, staff and any outstanding tax matters do need to be settled. The procedure for closure also requires an audit.

We have recently provided update advice and the procedural structure on this subject, please see the China Briefing issue “Closing Representative Offices and Liquidating Businesses in China” for more information.

Chris Devonshire-Ellis is the principal of Dezan Shira & Associates. Richard Hoffmann is a senior legal associate with the firm and is responsible for issues relating to expatriate employment and human resource legal and administrative matters in China. If you have queries about obtaining work permits in China, please contact Richard at legal@dezshira.com. Businesses requiring advice on liquidation procedures and related matters may contact Sabrina Zhang, national tax partner for the firm, in strict confidence at tax@dezshira.com.

By Bloomberg News

Aug. 23 (Bloomberg) -- China will crack down on foreign companies directly recruiting and hiring workers in China to do manual labor overseas, the Ministry of Commerce and the Ministry of Foreign Affairs said in a joint statement posted to the commerce ministry’s website today.

The government will also stop Chinese companies from sending labors from the nation to work overseas for foreign individuals, according to the statement. China will also strictly control the sending of Chinese labors to work in overseas nations where conditioners are worse than those domestically and where risks are high, according to the statement.

Nearly 73 percent of Taiwan's young men and women who graduated from universities or colleges this summer would not mind crossing the Taiwan Strait to work in China, the 1111 job bank quoted the results of a recent poll as indicating Tuesday.

Graduates who majored in business management, finance and economics topped the list of China-bound aspirants, the poll found.

Shanghai is the top choice in terms of location, with 73.08 percent of the new graduates who responded to the poll saying they would prefer to work there, followed by Hong Kong (46.15 percent) , Beijing (42.79 percent) , Guangzhou (21.15 percent) and Suzhou-Hangzhou (20.19 percent), according to the poll.

Work in the information technology sector is the most coveted job of the respondents, followed by trade and goods and services distribution (30.29 percent) , and industrial and business services (23.08 percent), the results show.

Some 63.46 percent of the respondents cited China "promising to become the world's leading market" as the major reason for their willingness to work there, while 62.5 percent said they want to work in China to expand their experience and 44.23 percent said working in China would help broaden their global perspective, according to the poll.

A total of 80.29 percent of the first-time job seekers who do not mind working in China said they expect a higher salary working in China than they could earn in Taiwan, at roughly NT$43,600 (US$1,364) per month, according to the poll.

The 1111 job bank conducted the survey between June 22 and July 5. It received 1,174 valid samples and had a confidence level of 95 percent and a margin of error of plus or minus 2.86 percentage points. (By Opal Cheng and Deborah Kuo) ENDITEM/J

China's central authorities have set down a more open policy to attract top-notch foreign talents to help promote the economic and social development and global competitiveness of the nation.

According to the newly unveiled National Medium and Long-term Talent Development Plan (2010-2020), the government will work out favorable policies in terms of taxation, insurance, housing, children and spouse settlement, career development, research projects, and government awards for high-calibre overseas talents who are willing to work in China.

Furthermore, the government will also improve the system for giving permanent residence rights to foreigners, explore the potential of a skilled migration program, and work out measures to ensure a talent supply, discovery and appraisal system.

The national plan, a blueprint for creating a highly skilled national work force over the next decade, aims to transform the country from being "labor-rich to talent-intensive."

Wang Huiyao, vice chairman of Beijing-based China Western Returned Scholars Association, said, "The measures outlined are very attractive. They've touched upon various concerns of talents from overseas including personal and career needs."

"The plan is practical and concrete compared with previous documents," said Wang, who help draft the plan.

A program to hire 1,000 overseas top-notch specialists initiated in late 2008 was also incorporated into the new plan as one of the 12 key projects to be completed over the next ten years.

By May this year, 662 people have been recruited under the program, which gives priority to leading scientists who are able to make breakthroughs in key technologies, develop high-tech industries and lead new research areas.

Xiao Mingzheng, director of the Human Resource Development and Management Research Center at Peking University said, "It's preferable to import talents rather than capital or technology."

"As China strives to adjust its economic growth pattern, it has become more important for it to tap others' 'brains'," he said.

"The new policies reflect China's open attitude to personnel recruitment - that is, the country not only exports talents to serve the world but also enables foreign talents to serve China's development," he said.

China's efforts to attract overseas talents have gone beyond the central government level.

The country recruited about 480,000 talents from foreign countries, Hong Kong, Macao and Taiwan last year, according to the State Administration of Foreign Experts Affairs.

And about 50,000 Chinese officials and professionals went overseas for various training programs last year.

Li Yuanchao, head of the Organization Department of the Central Committee of the Communist Party of China, said earlier this year, "Top-notch talents are crucial for improving the core competitiveness of a country, a region, and a company."

"Not only should the central government earnestly carry out its talent recruitment program. Local governments should also develop their own programs to create conditions to allow talents to achieve," he said.

Confidence among recruitment companies around the world about the prospects for hiring rose 11% in the five months to May so that 67% now expect revenue growth in the second half of the year, the Association of Executive Search Consultants said Tuesday.

As a result recruitment companies are expected to hire more staff to handle the increased business, with 48% of those people surveyed for the AESC's mid- year member outlook report saying they anticipate hiring more consultants in the second half of 2010.

The healthcare and life sciences sector and the energy and natural resources industries are currently the strongest two areas for hiring and are expected to be among those seeing the most growth in the second half of 2010, the AESC report said. The industrial and financial services sectors are also expected to see some of the biggest recoveries this year, it added.

"The latest results are indicative of an industry regaining strength following the downturn," said Peter Felix, AESC president. "Once again there is talk of a talent shortage in certain industries and functions, even though unemployment levels remain high."

China, India and Brazil are expected to see the greatest scarcity of talent in the second half of 2010 with 64.9% of those surveyed expecting China to experience a lack of personnel, while 37.8% and 37.2% said they thought India and Brazil, respectively, would experience problems, the report showed.

Those people in employment have become slightly more willing to consider making career moves as a result of the improving jobs market, with 45% of recruiters saying senior executives will consider moving jobs, up from 42% at the end of last year.

As the global race to the bottom for private industry labor continues, it seems the younger Chinese laborer - many of which are exposed to the rest of the world via the internets (sic) - is beginning to have enough. While not a new issue [Feb 28, 2008: China Raising Minimum Wage] the very high profile suicide cases at mega contract manufacturer Foxconn along with strikes at Honda plants in China are bringing this issue to the forefront of public conscience. Even Apple's Steve Jobs is concerned:

* Apple Inc Chief Executive Steve Jobs finds "troubling" a string of worker deaths at Foxconn, the contract manufacturer that assembles the company's iPhones and iPads, but said its factory in China "is not a sweatshop." "It's a difficult situation," Jobs, dressed in his customary black turtleneck and jeans, said on stage. "We're trying to understand right now, before we go in and say we know the solution."
* “The situation at Hon Hai is negative for Apple, so they need to work together to try to resolve this,” said Jenny Laia technology analyst at CLSA Ltd. in Taipei. About 70%of Apple’s products may be manufactured at Hon Hai’s facilities, she said.

Not everyone agrees with Mr. Jobs, who is obviously biased:

* Foxconn is a sweatshop that “tramples” the rights of workers partly because it pays about 900 yuan ($131) a month, forcing factory employees to do overtime to support themselves and their families, according to Li Qiang, founder and executive director of New York-based China China Labor Watch.

While this is a positive for "humanity" you can almost hear the siren call of other countries, such as Vietnam, [Apr 7, 2010: Vietnam Begins to Lure Business Away from China] beckoning for the world's corporations to exploit their workers if the Chinese won't have it.

* “We have been seeing wage inflation over the past several months,’’ said Chris Ruffle, who helps manage $19 billion as China co-chairman of Martin Currie Ltd. Rising salaries may prompt businesses that operate plants in China to move to lower-cost countries such as Vietnam and Cambodia, Ruffle said.

One can only wonder what nation's workers will be left to exploit circa 2025 when the Vietnamese and Cambodian worker inevitably rises up as the Chinese are doing. If only Africa had government stability! Perhaps North Korea will be willing to open its doors.

-----------------------------------

Via AP:

* Global manufacturers struggling with life-or-death pressures to control costs are finding that the legions of low-wage Chinese workers they rely on have limits. A strike at Honda Motor Co. and the official response to a spate of suicides at Foxconn Technology, a maker of electronics for industry giants such as Apple, Dell and Hewlett-Packard, suggests China's leaders are at least tacitly allowing workers to talk back.
* Over the weekend, the top communist party leader in Guangdong province visited Foxconn's sprawling factory where 10 workers have committed suicide and urged the company to adopt a "better, more humane working environment" for its mostly young workers, state media reported.
* "The 80s and 90s generation workers need more care and respect and need to be motivated to work with enthusiasm," said Guangdong party chief Wang Yang. (my assumption is he meant those workers born in the 80s and 90s)
* That transition is taking hold across China. Manufacturers, under pressure to deliver low prices in home markets, are struggling to attract and keep young workers who, brought up in an era of relative affluence, are proving less willing than earlier generations to "eat bitterness" by putting up with miserable working environments and poor wages.

* The strike at Honda also reflects broader trends of growing dissatisfaction among China's long-suffering workers with lagging wages and generally harsh working conditions. Employers in Shanghai complain of difficulties in finding and keeping young workers, both skilled and unskilled. Contractors were obliged to pay heavy bonuses to keep workers on the job during the lunar new year as they rushed to finish construction for the Shanghai World Expo, which runs for six months until Oct. 31.
* "Our economy can no longer rely on squeezing labor benefits, because workers are unwilling to accept it anymore. I have to say the squeeze is very cruel now," said Chang Kai, a labor expert at Beijing's Renmin University.
* Foxconn says it is installing safety nets on buildings and hiring more counselors at its 300,000-worker factory in Shenzhen, the boomtown bordering Hong Kong in Guangdong province that became the epicenter of China's first waves of cheap-labor export manufacturing in the 1980s-90s.
* The factory campus has air conditioned production lines, palm-tree lined streets, fast-food restaurants and recreation facilities. But labor activists accuse the company of demeaning and dehumanizing workers with a militaristic management style, excessively fast assembly lines and overwork that have overwhelmed some laborers in their late teens and early 20s and away from home perhaps for the first time.
* (in the Honda plant) "Most of the employees on strike at the plant have agreed to new wages, and some production started there from today," said Honda spokeswoman Yasuko Matsuura in Tokyo. She said "almost all" of the striking workers have agreed to increasing the total starting wage by about 24% to 1,910 yuan ($280) per month.
* China outlaws unauthorized labor organizing, limiting such activities to the government-affiliated All China Federation of Trade Unions and to company branches of the ruling Communist Party. But in recent years authorities increasingly appear to be tolerating sporadic, peaceful protests by aggrieved workers.
* "Wages have been rising in recent years, but compared with soaring prices they remain very low," said Li Qiang, founder of New York-based China Labor Watch. "The government recognizes that problem, so even if strikes are still illegal some are tacitly condoned, though the strikes and protests have to stay within certain limits," he said.
* Working conditions vary widely across China -- from modern factories in full compliance with Western standards to slave labor brick kilns. Yet another of those was reported after 34 migrant workers were freed by a police raid in northern Hebei province, the state-run newspaper China Daily said Monday.

and....

* "The Foxconn incident shows one big problem: people are not machines," Jin Bei, head of the industrial research institute of the Chinese Academy of Social Sciences, said in a commentary Monday in the China Business Journal.

Ah, if only they were! The need for sleep is such a human weakness - Sincerely, HAL9000.

--------------------------------

Another story via Bloomberg on this problem re: People are not robots.

* Ah Wei has an explanation for Foxconn Technology Group Chairman Terry Gou why some of his workers are committing suicide at the company’s factory near the southern Chinese city of Shenzhen. “Life is meaningless,” said Ah Wei, his fingernails stained black with the dust from the hundreds of mobile phones he has burnished over the course of a 12-hour overnight shift. “Everyday, I repeat the same thing I did yesterday. We get yelled at all the time. It’s very tough around here.”
* Conversation on the production line is forbidden, bathroom breaks are kept to 10 minutes every two hours and constant noise from the factory washes past his ear plugs, damaging his hearing, Ah Wei said. The company has rejected three requests for a transfer and his monthly salary of 900 yuan ($132) is too meager to send money home to his family.
* At least 10 employees at Taipei-based Foxconn have taken their lives this year, half of them in May, according to the company, also known as Hon Hai Group. The deaths have forced billionaire founder Gou to open his factories to outside scrutiny and apologize for not being able to stop the suicides.
* Foxconn’s Longhua complex outside Shenzhen spans three square kilometers (1.16 square miles) and is criss-crossed by tree-lined streets with a water fountain at the center of the facility. Workers wearing polo shirts emblazoned with ‘Foxconn’ in Chinese characters over their hearts walk along the streets. Men wear blue, women wear red. Security personnel wear white. The complex boasts its own hospital, a collection of restaurants and a swimming pool surrounded by palm trees.
* The workers, 86% of whom are under 25 years old, live in white dormitories with eight to ten people sleeping in a room. The living quarters have stairs running up the outside walls and the company has begun covering them with nets to prevent people from jumping.
* About 80% of the front-line production employees work standing up, some for 12 hours a day for six days a week, according to Liu Bin, a 24-year-old employee.
* “It’s hard to make friends because you aren’t allowed to chat with your colleagues during work,” Liu said at Shenzhen Kang Ning Hospital where he was seeking help for insomnia. “Most of us have little education and have no skills so we have no choice but to do this kind of jobs. I feel no sense of achievement and I’ve become a machine.” (somewhere HAL9000 is smiling)
* “The fundamental problem for Foxconn and other Chinese factories is that their business model relies on a low-cost workforce sourced from rural areas of China,” said Pun Ngai, a professor of applied social sciences at the Hong Kong Polytechnic University “Due to its size, Foxconn has to be that much tougher than other factories, and has to become more emotionally detached from its employees than others.”
* Foxconn raised pay for workers by 30 percent to 1,200 yuan from 900 yuan a month, spokesman Ding said today. The additional money may not be enough to stem the suicides, according to Xiao Qi, a college graduate who works at Foxconn in product development. He earns 2,000 yuan a month, yet gets no joy from his job, he said. “I do the same thing every day; I feel empty inside,” said Xiao, who said he has considered suicide. “I have no future.”

By HIROKO TABUCHI

TOKYO — The strike that has crippled production at Honda Motor’s factories in China has come as a wake-up call to Japan’s flagship exporters as they seek to remain competitive and push into China’s burgeoning market with the help of low-wage workers.
Related

The strike by Chinese workers to protest pay and working conditions has cost Honda, Japan’s second-largest carmaker after Toyota, thousands of units in lost production in the world’s biggest auto market. The walkout began on May 17 at a Honda transmission factory in Foshan, in the southeast, and has shut down all four of Honda’s factories on the mainland.

“Honda takes the situation very seriously,” said Yasuko Matsuura, a spokeswoman for Honda in Tokyo. The company “is working toward reaching a resolution as soon as possible.” On Tuesday, there were conflicting accounts by the company and Chinese employees about how soon workers might return to their jobs.

In Tokyo, the strike has driven home a salient point: as Chinese incomes and expectations rise in line with the country’s rapid growth, while Japan’s own economy falters, the two countries face a realignment that could permanently alter the way their economies interact.

To complicate the picture, Japanese companies see the Chinese as crucial consumers of their goods to make up for a shrinking and aging market at home. Some of the most profitable Japanese companies, like Fast Retailing, which runs the budget clothing line Uniqlo, have relied on production in China since the 1990s to keep prices low.

“Japan is starting to realize that the age of cheap wages in China is coming to an end, and companies that looked to China only for lower costs need to change course,” said Tomoo Marukawa, a specialist on the Chinese economy at Tokyo University.

Despite the consequences for production costs, a rise in wages and standards of living in China would be welcomed by many Japanese exporters. The same companies that produce in China have also moved to sell their wares there, moving factories to the mainland to reduce costs further and meet the needs of local customers.

In Uniqlo’s case, as incomes in China rose, it followed up with local stores in 2002; the company has opened 64 outlets in China and aims to open 1,000 stores there in the next decade.

And yet, for Honda, prices of its cars in China may have to drop considerably before the company can truly tap into the market.

The strike by 1,900 workers at Honda’s Foshan factory came as a particularly big shock to Honda, which had announced just days before that it would increase production in China to meet demand.

Honda’s chief executive, Takanobu Ito, had said the automaker would begin major expansions at two joint ventures in China, Guangqi Honda and Dongfeng Honda, increasing capacity by 30 percent to 830,000 cars and minivans by 2012.

In April alone, Honda made 58,814 cars in China, a 28.7 percent increase from the same month the previous year and a monthly record.

Five of six Japanese car manufacturers with factories in China broke production records in April.

“The wave of motorization in China will not abate for the foreseeable future,” Mr. Ito said last week. He said that Guangqi Honda would introduce a compact car intended especially for the Chinese market that would be produced there in 2011.

The rise in output in China has been driven by a strong economic recovery in that country, which is buoying auto sales more than in any other major market. The rebound has been good news for Japanese automakers, hard-pressed to cut costs as they seek to return to profit after a collapse in car sales because of the global economic crisis.

Auto sales in Japan have remained sluggish, and sales in the United States and Europe have not rebounded to precrisis levels.

In China, Japanese carmakers are also racing to catch up with rivals after arriving relatively late in the market. The first Honda rolled out of a plant in Guangzhou in 1999, while Toyota did not produce in China until 2002.

Though sales have grown rapidly since then, Japanese carmakers are still struggling against local rivals because of a dearth of small, low-cost models, which are driving market growth in China.

Honda’s least expensive model sold in China, the Fit compact car with a 1.3-liter engine, is priced at about 83,000 renminbi, or about $12,500. A Chery QQ 1.3-liter minicar from the Chinese carmaker Chery Auto sells for about half the price of the Fit.

Given that the average monthly income in China s is 2,050 renminbi, about $300, the price of a Chery QQ is around 19 months’ salary, while the Honda Fit requires more than 40 months. The Honda Accord 2.4-liter sedan, meanwhile, sells in China for about $35,000, far beyond the reach of most workers.

For Honda, the promise of access to a huge, growing market in China was as much a factor as cheaper labor in luring it to open factories there. A 25 percent import tariff on foreign cars is also a major incentive for foreign automakers to produce in China.

More quickly than any other major Japanese automaker, Honda has started exporting cars made in China to third countries. A small plant in Guangdong makes its Jazz model for export.

Besides complaining about their pay, Honda’s striking workers complain about a wage gap: the company’s Japanese employees in China are paid about 50 times what local Chinese workers receive.

Experts say that at the factory level, Japanese companies will need to start changing the way they work with employees — giving them fair pay, benefits and a chance for promotion in line with those accorded to employees from headquarters in Japan.

“Japanese manufacturers need to raise morale by making sure that local staff can also climb within the company,” said Tatsuo Matsumoto, Asia researcher at the Japan Center for International Finance.

Studying abroad, pursuing a Master’s Degree, entering the civil service sector and marriage are most common choices of female college graduates in China nowadays. Finding private sector employment is the choice of only a small proportion of female students. The National Women’s Association released the results of a survey which indicated that 90% of female college graduates had sensed gender inequality and discrimination when seeking job opportunities.

Recently, MyCOS, a third-party research agency completed a survey of female students. The survey showed that the employment rate for female college graduates is 21%, which is much lower when compared to the 29.5% for male students.

It is common knowledge that female students have unequal opportunity in the job application process. Because of the physical limitations of female applicators, some employers are more inclined to recruit men. A few employers even put up whiteboards indicating “Positions for men”, “Priority - Boys” or even “We don’t accept girl students”. There is also invisible discrimination against females in the selecting of resumes and even though employers may not have specified a gender requirement in their job descriptions, they do not consider the resumes of girl students after accepting their CVs.

Female students are often asked private gender-related questions such as the status of their relationship, intention to marry and have children. Some are even asked to not get married for five years on being offered the job. Because of the unique business culture in China, questions like “Can you drink?” or “Can you travel a lot for business?” are also not rare.

Apart from the recruitment process, discrimination is also present with regard to the occupations and positions offered to female students on their employment. Compared to men, women are usually employed in service and labor-intensive industries, including education and health care, diet, secretary and performing arts industries. On March 3rd this year, a job fair for female college graduates held by the Beijing Graduates Employment Service Centre attracted more than 3,000 women applicants. However, disappointingly, more than 600 of the job posts were secretarial, accounting and customer service positions. In terms of promotion, priority is also always given to men in some companies. Men do core operational work while women often do civilian work in a company. Besides this, there is also a difference in income between men and women in the same positions requiring similar capabilities.

The reasons for the dilemma of female college graduates are as follows:
The overall employment situation in China is not that satisfactory.
Sexual discrimination against women in the job market and incomplete social assurance for women’s childbirth security has not harnessed women’s employment and development.
There are limitations in the selection of professions among female students themselves. Many are inclined to work in hot sectors like financial and media, and prefer to work in major cities rather than 2nd and 3rd tier cities.
There is gap between the needs of the job market and the existing allocation of majors and research areas in college.
To alleviate some of these concerns for companies and women, the government is expected to pay for maternity leave.

Companies and civil organizations are expected to work with colleges to establish institutions for female undergraduates to offer vocational training and courses on practical business operation. Voluntary service is also a good approach to improve the capacity of female students. Some celebrities are calling for the release of a national regulation on voluntary services to guarantee the rights and interests of volunteers, making voluntary services more complete and using it as a building platform for social practice for female students before their employment.

Companies can consider working with influential and experienced partners on campus. Since 2009, the National Women’s Association has promoted entrepreneurship on campus. The organization organized lectures and tours of women entrepreneurs, conveying a new philosophy of employment and entrepreneurship, encouraging female students to set up their own business by applying for micro-finance loans. It has also promoted the construction of social practice base for female students. Based on a partnership with a number of reputational and responsible enterprises, they offer a great deal of internship opportunities that lasts for 3 months to half a year for female students annually.

by Elyse Chen

BEIJING, May 26 (Xinhua) -- Almost 96 percent of China's secondary vocational school graduates found jobs on graduation last year, the Ministry of Education announced Wednesday.

It was the fifth straight year that the vocational graduate employment rate exceeded 95 percent.

The high employment rate reflected the huge market demand for medium-level technicians, said Wang Jiping, vice director of the ministry's Department of Vocational and Adult Education.

Last year, 6.08 million students graduated from secondary vocational schools, and 95.99 percent of them were employed on graduation.

Wang said the qualifications in highest demand were manufacturing, information technology, civil engineering, trade and tourism, and transportation.

However, the threshold pay for graduates was relatively low.

A sample survey earlier this year in secondary vocational schools across China showed that a quarter of threshold pay was lower than 1,000 yuan (146 U.S. dollars) a month.

Wang said vocational schools across China should tailor curriculums to the demands of specific industries.

At the same press conference, ministry official Song Yonggang said 66,000 teachers would be recruited this year to work at rural schools in central and western China where teachers are in short supply.

The recruitment, under a program initiated in 2006, would see the central government guarantee the teachers equal pay with urban counterparts in their first three years.

Previously, teachers were reluctant to work in rural areas because the pay, funded from local budgets, was lower than in cities.

Moves to strengthen

China’s Public Service recruitment systems have commenced, with the Deputy Director of the State Administration of Civil Service calling for improvements.

The Deputy Director, Yang Shiqiu said the Public Service written exam and interviews needed to be strengthened to make the system more competitive. Mr Yang said assessments of candidates and open selection also needed to improve to ensure the most talented applicants were recruited into the ranks of the PS.

He said a constant effort should be made to improve the selection of staff and that Departments and Agencies should make plans well before carrying out competitive recruitment. Mr Yang said Agencies should make personnel allocation of mid-level cadres and below clear at the beginning of every year and make annual arrangements in line with directions from the Central Government.

He said any Agencies that had not carried out competitive employment processes needed to learn from those which had. Mr Yang urged all to adapt the competitive employment system and to implement it as soon as possible.

He said organisations that had already adopted the system should continue to improve it. He said Agencies should avoid carrying out competitive employment sporadically and should implement it at all times, not just when requested to do so by higher authorities.

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Graduation season is upon us, and everyone from President Obama to John Grisham is delivering commencement speeches across the country. TIME looks at some of the most successful people to never receive their sheepskins.

1. Bill Gates

The Harvard Crimson called him “Harvard’s most successful dropout” — the rest of the world just calls him ridiculously rich. For more than a decade, Bill Gates has been one of the wealthiest, if not the wealthiest, men in the world. The son of an attorney and a schoolteacher, Gates entered Harvard in the fall of 1973, only to drop out two years later to found Microsoft with childhood friend Paul Allen. In 2007, more than thirty years after he left Harvard, the co-founder of Microsoft would finally receive his degree (an honorary doctorate) from his alma mater. At the commencement, Gates said, “I’m a bad influence. That’s why I was invited to speak at your graduation. If I had spoken at your orientation, fewer of you might be here today.”

2. Steve Jobs

The Mac, the iPod, heck, even Buzz Lightyear probably wouldn’t have existed had Steve Jobs stayed in school. The future wizard of One Infinite Loop dropped out of Reed College after just six months because of the undue financial strain it placed on his working-class parents’ savings. He would go on to eventually found Apple, NeXT Computer and Pixar, becoming an instrumental force in shaping the landscape of modern culture. However, his brief tenure in academia was not for naught. In a 2005 commencement speech he gave at Stanford University, Jobs credited a calligraphy class he took at Reed College with forming the basis for the typography used in the first Macintosh computer.

3. Frank Lloyd Wright

America’s most celebrated architect spent more time designing colleges than attending them. Frank Lloyd Wright was admitted to the University of Wisconsin-Madison in 1886, but left after only one year. He would move to Chicago and eventually apprentice under Louis Sullivan, the “father of modernism.” By the time of his passing, Wright’s resume included more than 500 works, most famous of which are Fallingwater and New York City’s Solomon R. Guggenheim Museum.

4. Buckminster Fuller

Buckminster Fuller — architect, thinker, inventor, futurist, college dropout. Expelled from Harvard not once, but twice, Fuller’s post-dropout period was anything but successful. He suffered a string of bad business ventures and years of anguish following his daughter’s death. While Fuller could have settled for a less than extraordinary life — he even contemplated suicide — he refused to buck to the bevy of bad breaks. At the age of 32, Fuller set out on a one man quest to change the world for the better. His unorthodox ideas such as the dymaxion (a portmanteau of dynamic maximum tension) house and dymaxion car captivated the nation, while his iconic geodesic domes would bring him international fame and recognition.

5. James Cameron

The Academy Award-winning director followed a circuitous route to Hollywood. Born and raised in Canada, he and his family moved to Brea, California in 1971. It was there that the young Cameron enrolled in Fullerton College to study physics. His academic life did not last long. He would drop out, marry a waitress and eventually become a truck driver for the local school district. It was not until he saw Star Wars in 1977 that Cameron would trade his blue collar career for one creating some of the late 20th-century’s most stunning (and expensive) science-fiction movies.

6. Mark Zuckerberg

Most college students use their dorm rooms to sleep, study, or do things their parents probably don’t want to know about. Mark Zuckerberg founded Facebook in his. Originally meant only for Harvard students, the popular social networking site quickly spread to the rest of the Ivies and other colleges across the nation. As Facebook’s popularity exploded, Zuckerberg packed up his bags and relocated the fledgling company to Palo Alto, California, forever leaving behind Harvard’s hallowed halls. So far, the decision has worked out pretty well for the twenty-something. According to Forbes, Zuckerberg is the youngest billionaire in the world, with a 2010 net worth of $4 billion.

7. Tom Hanks

TIME has called Tom Hanks America’s chronicler in chief; Sacramento State can call him their most famous dropout. The storied actor left college to intern full time at the Great Lakes Theater Festival in Cleveland, Ohio. There, he learned various aspects of theater from lighting to set design, laying the foundation for his Hollywood career as movie star, producer, director and writer. Not one to forget his own past, in 2009 Hanks helped fund-raise money to help renovate the Cleveland theater where he got his start.

8. Harrison Ford

Apparently a college degree isn’t a prerequisite for flying the Millennium Falcon. Harrison Ford, of Star Wars and Indiana Jones fame, majored in philosophy at Ripon College, but dropped out shortly before graduation. He subsequently landed several small parts in Hollywood productions, but unhappy with such minor roles, turned to a career in professional carpentry instead. Almost ten years later, he would co-star in George Lucas’ 1973 graduation night comedy American Graffiti and subsequently joined Lucas in a galaxy far, far away in the 1977 blockbuster Star Wars.

9. Lady Gaga

Before she was a Gaga, she was a Germanotta. Born Stefani Joanne Angelina Germanotta, the artist better known as Lady Gaga attended New York University’s Tisch School of the Arts, but dropped out after just a year to pursue her music career full time. She broke onto the New York club scene with her burlesque performances and was signed to Interscope Records by the age of 20. Her 2008 debut album, The Fame, has had the world going gaga for Gaga ever since.

10.Tiger Woods

In a world where prodigious sports talents tend to forgo higher education altogether for the pros, Tiger Woods chose to continue playing amateur golf at Stanford University as an economics major. Perhaps it was in Econ 101 that he learned the term “opportunity cost,” because his time at Stanford was not long. After two years there, Woods turned pro with his “Hello world” announcement, officially ending his collegiate career. He would go on to become one of the highest paid athletes in the world, earning more than $100 million annually at the height of his career. How?s that for economics?

Time

Job prospects for executives at multinationals in Greater China and Singapore have improved sharply in the past three months amid growing optimism that Asia's recovery from the global recession will be sustainable, a quarterly survey showed on Thursday.

'Asia is the first region to emerge from the global recession, causing employers to revise their hiring expectations sharply upwards,' said Mike Game, chief executive of executive recruiters Hudson Asia.

In China, hiring prospects picked up for the first time in more than a year. The proportion of employers in China, Hong Kong and Singapore who plan to cut headcounts within three months is less than half that in a similar survey taken in May. The latest survey was taken in August.

Hiring expectations have increased most in Hong Kong, where 35 percent of companies say they expect to recruit staff within three months, up from 22 percent in May. In media, public relations and advertising, 69 percent of companies said they would be hiring, compared with 28 percent in the previous survey.

In China, 39 percent of employers said they planned to add staff, up from 27 percent in the May survey, with companies in banking and finance most bullish about hiring.

Hong Kong and Singapore pulled out of recession in the second quarter while China on Thursday announced an 8.9 percent surge in third-quarter GDP, putting it easily within reach of its 8 percent growth target for this year, economists say.

WAGE GROWTH

Salaries are set to accelerate across Asia next year as business conditions improve: a survey by U.S. HR consultants Hewitt Consultants forecasts salaries in China will jump 6.7 percent next year after rising only 4.5 percent this year. Pay rises in Hong Kong and Singapore will be more modest at just under 3 percent.

In Singapore, 34 percent of companies in the Hudson survey said they would be hiring soon, up from 26 percent in the May survey, and only 5 percent said they would cut staff, compared with 14 percent in May. The healthcare and life sciences sector continues to offer the best hiring opportunities in Singapore with 44 percent of companies preparing to add headcount, while the consumer sector has seen a slight fall in hiring expectations since May.

Singapore employers were most willing to hire candidates who had been unemployed for more than a year, or an extended period of time, while employers in China were least willing to do so, according to Hudson.

Previous experience and specialist skills were cited as the main reasons to hire the long-term unemployed across the region but, in China, stopping work to obtain a higher qualification was also seen as a valid reason.

The quarterly survey covered responses from nearly 2,000 managers at multinational companies across industries in the three markets.

GUANGZHOU, China — Two factories that make Microsoft Corp. products in southern China violated overtime regulations and failed to properly register the use of workers aged 16 to 18, officials said Monday.

The problems at the plants in the city of Dongguan were initially raised last week by the National Labor Committee, a New York-based nonprofit that monitors the treatment of foreign workers by U.S. companies. The group alleged that the teen laborers worked long shifts and were not allowed to use bathrooms during working hours at the plants, owned by Taiwan-based KYE Systems Corp.

The factories make Webcams, computer mice and Xbox controllers for Microsoft, the world's biggest software company.

Investigators with Dongguan's human resources bureau said in a report that factories are allowed to hire workers between the ages of 16 and 18 as long as the laborers are registered with the authorities. The KYE factories had 385 such workers — most supplied by vocational schools — and 326 weren't properly registered, the report said.

Employees were also forced to work an excessive amount of overtime in March, clocking about 280 hours, the report said. Copies of the labor contract also weren't given to employees, the document said.

But officials said that based on interviews with workers, there were no restrictions against using the restroom during shifts. The report said the company's policy was to give workers 10-minute breaks for every two hours worked.

KYE Systems Corp. spokesman Lai Jin-hui told The Associated Press, "Assembly line workers are allowed to go to bathroom only if they report the need."

Lai insisted that factories did nothing wrong regarding overtime and had followed regulations that limit the workweek to 60 hours. But Lai acknowledged that the factories failed to properly register workers and would now fix the problem.

The human resources bureau report said the factories have been ordered to comply with the law and would be monitored closely.

Last week, Microsoft said it does quarterly onsite assessments and gets weekly reports from KYE about certain labor and safety criteria. The software maker said a team of independent auditors would visit the factories and monitor the situation pending results of its inspection.

Associated Press writer Annie Huang in Taipei, Taiwan, contributed to this report.

BOAO, CHINA (Dow Jones)--Deloitte Touche Tohmatsu International, one of the world's big four accounting firms, will put an additional $100 million in China in the coming years to support its business and staff expansion in one of the world's fastest-growing markets, the company's chief executive said over the weekend.

China is Deloitte's fourth-largest market in terms of employees, with more than 8,000 people in 13 cities across mainland China, Hong Kong and Macau. Its business includes auditing financial results of companies, helping companies to prepare tax returns, and consulting.

"Deloitte is committed to China. An 8% growth rate and the prospect of sustaining superior growth going forward makes it an attractive place for a professional services firm to want to be," CEO James Quigley said on the sidelines of annual Boao Forum, a gathering of government and business leaders on the southern Chinese island of Hainan.

"When I have made my investment decisions as the CEO of Deloitte, the market where we are investing the most is in China," he added.

In 2004, Deloitte announced a $150 million investment for its China business over five years, with the lion's share of the money having gone toward recruiting and retaining staff.

"We've now expanded. So another $100 million is coming this direction as we continue to want to grow our business here, and take advantage of the opportunities available to serve China companies and to serve companies outside of China who want to invest here," said Quigley.

He added the $100 million would be invested over three to five years.

Christopher Lu, Deloitte chief executive officer for China, said the company will continue to hire between 1,000 and 2,000 workers in China annually as part of its expansion.

"If you look at complex transactions, for instance, derivatives and others, you need to have experts that truly understand these areas," he said. "We spend a tremendous amount of our annual operation funds in training and developing people."

In June, Deloitte will set up a team in Hong Kong of senior managers from 16 countries to help Chinese companies with tax services for international investments.

Deloitte's main target clients in China are large state-owned enterprises, private companies, multinational corporations and high-potential rapid growth enterprises, particularly in the technology sector.

-Rose Yu contributed to this article, Dow Jones Newswires; 8621 6120-1200; rose.yu@dowjones.com

Telecom equipment provider ZTE is likely to send 250 Chinese employees back as it is obliged to recruit Indian employees in all of its operations in India over the next 3 years.

The move has taken place in the wake of the release of the Government's directive, last month, which expects all the foreign telecom equipment companies in India to employ only Indian engineers.

At present, out of the total 2,300 staffers of ZTE in India, 15% are Chinese. The company has been planning to recruit another 1,000 engineers by March 2011.

The company's unit in India contributes to over 10% its global revenues, which was reported to be $8.8 billion in fiscal 2009-10.

DK Ghosh, Chairman, ZTE Telecom India, "It is part of our localization policy and has nothing to do with the department of telecom (DoT) directive".

Mr. Ghosh added that around 95% of ZTE's manforce in India constitutes engineers. The move, as directed by the Government, will reduce its Chinese staff strength to merely 3%.

The Government's directive, called DoT, was issued in March, asked for a strict adherence of the foreign operators to the new instructions.

By NICK WINGFIELD

Microsoft Corp. said it is investigating allegations of worker abuse at a factory in China that makes computer mice, cameras and other devices for the technology giant.

The move was prompted by a report published this week by a Pittsburgh-based human rights advocacy group, the National Labor Committee, which alleges a factory in Dongguan, China, operated by KYE Systems Corp. overworks young employees and houses them in harsh conditions.

Microsoft devices represent a significant portion of the products made at the factory, though KYE makes products for other companies there as well, according to the report.

"The factory was really run like a minimum security prison," Charles Kernaghan, director of the National Labor Committee, said in an interview.

In a statement issued in Taiwan, where it has headquarters, KYE Systems said it has never hired workers under 16, and that its employees get one day off every seven, with extra hours in peak season but never more than 12 hours a day. It said that while its wages are low by U.S. standards, they are in accordance with Chinese regulations. "We regret that the NLC reported a one-sided story without offering us a chance to explain," the statement said. The company's Web site says it employs between 3,600 and 4,500 workers in China, depending on seasonal demand.

In a blog post on Thursday, Microsoft executive Brian Tobey said, as a result of the National Labor Committee's report, the company has "a team of independent auditors en route to the facility to conduct a complete and thorough investigation."

Mr. Tobey said Microsoft auditors inspect KYE facilities annually and haven't detected violation of child labor laws for the past two years. He said worker overtime "has been significantly reduced" at the factory and that compensation is in line with labor standards for the area where the factory is located.

Mr. Tobey is corporate vice president of manufacturing and operations for the Microsoft unit that makes the Xbox videogame console, the Zune music player and other hardware.

The National Labor Committee report alleges KYE recruits employees many of whom are 16 and 17 years old to work 15-hour shifts six to seven days a week, paying them 65 cents an hour—or 52 cents an hour after deductions for food.

Workers are housed in cramped quarters in factory dormitories and prohibited from talking, listening to music or using the bathroom during work hours, the report says.

The report is another sign of growing scrutiny of the companies the technology industry widely relies on to make electronics products.

In February, Apple Inc. said an internal audit of its suppliers last year uncovered more than a dozen violations of the company's labor policies, including several in which contractors hired underage workers. Apple began auditing worker conditions after reports of worker abuses at Chinese factories that made iPods.
—Ting-I Tsai contributed to this article.

6 personality traits that will impress your boss and increase your salary
by Sara Eckel, PayScale.com

You work hard--meeting deadlines, delivering results, and showing up on time. But each year you've been getting a raise in the measly 2 percent range (if that). Meanwhile, certain coworkers stroll out of their review meetings with big smiles on their faces.

Why do some people get a fat, juicy slab of the pie while others are offered crumbs? Experts say that, of course, diligence and talent play their part, but if you really want to increase your salary, you'll need these qualities:

1. An Owner's Mentality

Many people go into their annual review with a list of reasons that they need more money. But Joel Rudy, vice president of operations for Photographic Solutions, a supplier of digital-camera cleaning products, says that such pleas don't inspire employers to give raises. "I know that utilities have gone up," he says. He is more impressed with people who apply those inflationary concerns to the business--as if it were their own. For example, he was recently impressed with an employee who found a less expensive phone plan for the company. "Now, that's a raise-getter!" he says.

2. Forward-Thinking

While the people who get good raises definitely know how to highlight last year's achievements, Laura Browne, a corporate trainer and the author of "Raise Rules for Women: How to Make More Money at Work," says the highest earners don't dwell on the past. "Forget about last year. Find out the key initiatives that your company or your president wants to achieve this year," she says. For example, if the president said in the annual report that he wants to increase customer satisfaction by 15 percent, focus on that goal. "Your work needs to be connected with what the company cares about right now," says Browne.

3. Visibility

If you stay cloistered in your cubicle, you'll probably be disappointed when raises are announced--no matter how hard you work. "Quiet, shy, or otherwise invisible types are often left behind when it's pay-raise time," says Jane Goldner, PhD., president of The Goldner Group, an Atlanta-based consulting firm. To ensure that you and your hard work are seen, request projects that will get you in front of others--working with colleagues from other departments, giving presentations, or even contributing to the company newsletter. This will make it easier for your boss to plead your case to any necessary approvers. "If your boss is in the meeting and says, 'I want to give a raise to Sally,' it's going to be hard if no one knows who Sally is. On the other hand, if you have been visibly helpful, they'll say, 'Oh Sally, She's terrific!'" says Browne.

4. Charisma

Having great ideas and lofty goals is terrific. But if you want to see them executed, you also have to motivate others to rally around your initiatives. Executive coach Lisa Chenofsky Singer says these kind of interpersonal skills play a huge role when compensation is discussed. "Although someone may be competent from a technical-qualifications perspective, if their style doesn't flow well with others or they're not able to influence others, they tend to be the low-increased players," she says.

5. Tough Skin

No boss will ever say, "I love to give raises to self-promoters." So how do you draw attention to your achievements without looking like a braggart? Milan P. Yager, president and CEO of the National Association of Professional Employer Organizations, says that giving your boss a quarterly progress report and asking for feedback is a subtle way to get noticed. "It is a fine line, but if you can master the technique, it will pay rewards," he says. And letting your supervisors know that you want criticism will show them that you have the confidence to handle any negative comments, which makes the evaluation process a lot less stressful for them.

6. Empathy for the Boss

The highest-earning employees understand that their job is to make their boss's life easier. Think about the things that your boss doesn't like doing--running meetings, tracking numbers--and ask if you can help by taking over those tasks. It's also important to understand that your boss can't always give you what you want, no matter how great your work is. "Most people get keyed up to ask for a raise and when they hear 'no' they respond really negatively," says Browne. "If you instead say, 'I understand, but when raises are unfrozen I would like to be the first in line,' you'll have a much better chance of getting the raise when they can give it."

Genpact, the back-office services provider, on Tuesday said it plans to scale up its operations in China and increase its headcount by 6,500 in that market in the next five years.

"China and Japan are an important market for us. It contributes about 10 per cent to Genpacts overall revenue. We plan to take our headcount in China to 10,000 in the next five years," Genpact CEO Pramod Bhasin told media.

Genpact, at present, has two centres in China which employs about 3,500 people.

The BPO firm today also inked a multi-year deal with Japan's Hikari Tsushin to provide services to Hikari's clients in Japan and China.

Genpact had signed the contract with Hello Communications, a 100 per cent subsidiary of Hikari Tsushin to provide customer service, finance and accounting, IT infrastructure support and back office processing to Hikari.

"The deal with Hikari will allow us to further expand our footprint in the Chinese and Japanese markets," Bhasin said.

He added that the tenure of the deal could be 3-5 years, however, he declined to share details about the size of the deal.

Shigetaro Toyoda, CEO of Hello Communications said, "The integration of the sales and marketing skills of Hikari Tsushin and Genpact's services will enable a faster time-to- market and lower operating costs."

HONG KONG, April 1 (Bernama) -- More graduates of top business schools in Europe and the United States are turning to Hong Kong in search of work as Western countries struggle to emerge from the economic crisis, a school director said here Thursday.

In the past, New York and London were considered to be the cities of choice for top-notch MBA graduates.

But, since job markets in the West have slid downhill, the positive outlook for Asia -- with China as the region's economic growth engine -- has recently drawn more graduates to Hong Kong, an Associate Director at London Business School's career services recruitment team Richard Bland said.

He said dozens of graduates of London Business School, widely considered to be among the global top-five business schools, visited Hong Kong this week for unofficials meetings with figures at major financial institutions here, South Korea's Yonhap news agency reports.

Bland was in Hong Kong, arranging the meetings between the graduates and the eight financial institutions, which included Citigroup Inc.

Speaking to reporters, he said many students are starting to turn their attention to Asia, as it has rebounded rapidly from the financial crisis.

"Hong Kong has advantages over Shanghai or Beijing, as its sound financial system integrates China with the rest of the world," he added.

Keith Bradsher, The New York Times

Just a year after laying off millions of factory workers, China is facing an increasingly acute labour shortage...

Chinese workers enjoy their meal beside a billboard in Beijing . APAs American workers struggle with near double-digit unemployment, unskilled factory workers here in China’s industrial heartland are being offered signing bonuses. Factory wages have risen as much as 20 per cent in recent months.

Telemarketers are turning away potential customers because recruiters have fully booked them to cold-call people and offer them jobs. Some manufacturers, already weeks behind schedule because they can’t find enough workers, are closing down production lines and considering raising prices. Such increases would most likely drive up the prices American consumers pay for all sorts of Chinese-made goods.

Rising wages could also lead to greater inflation in China. In the past, inflation has sown social unrest. The immediate cause of the shortage is that millions of migrant workers who traveled home for the long lunar New Year earlier this month are not returning to the coast. Thanks to a half-trillion-dollar government stimulus programme, jobs are being created in the interior.

But many economists say the recent global downturn also obscured a longer-term trend: China has drained its once vast reserves of unemployed workers in rural areas and is running out of fresh labourers for its factories. Since China does not release reliable, timely statistics on employment, wages are considered the best barometer of labor shortages. And temp agencies here in Guangzhou raised their rate for factory workers this week to $1.17 an hour, from 95 cents an hour before the new year holiday. The rate was 80 cents an hour two years ago, before the global financial crisis temporarily depressed wages and demand. The dearth of returning migrants set off a desperate scramble this week to recruit the workers who did step off long-haul buses and trains returning from the interior.

At a government-run employment centre in downtown Guangzhou, employers seeking workers outnumbered job-hunters recently. Outside, Liang Huoqiao, a 22-year-old plastics worker, joined a small group of men and women studying a 40-foot-wide list of companies seeking workers. “You can walk into any factory and get a job,” he said.

The official China Daily newspaper said that surveys of employers showed that one in 12 migrant workers was not expected to return here to Guangdong Province. Cities farther north along China’s coast are also running low on labor; Wenzhou alone posted a shortage of up to one million workers. Guangdong provincial officials announced that they were considering increasing the minimum wage, which varies by city and ranges from $113 to $146 a month.

Higher wages could ease labour shortages by prompting factories to reduce their work forces. But many factories already pay well above the minimum wage. They are wary of further pay increases because it is not certain they can pass the increased costs on to their customers — in particular, strapped importers in the United States and the European Union.

Rising wages suggest the re-emergence of a worker shortage that was becoming evident before the financial crisis. A government survey three years ago of 2,749 villages in 17 provinces found that in 74 per cent of them, there was no one left behind who was fit to go work in city factories — the labour pool was dry.

Mass layoffs in late 2008 and early 2009 because of the global financial crisis temporarily masked the developing shortage of industrial workers. But two powerful trends were still working to reduce the supply of young people headed for factories.

For one, the Chinese government has rapidly expanded postsecondary education. Universities and other institutions of higher learning enrolled 6.4 million new students last year, compared to 5.7 million in 2007 and just 2.2 million in 2000.

At the same time, China’s birth rate has been sliding steadily ever since the introduction of the “one child” policy in 1977. Labour shortages have returned quickly in recent weeks as these long-term trends have collided with a recovery in overseas demand for Chinese goods.

Far more jobs are available these days in China’s interior. Government projects like rail and highway construction have absorbed millions of workers, particularly after Beijing allocated nearly $600 billion to economic stimulus spending in 2009 and 2010. Consumer spending is also rising briskly; auto sales more than doubled last month from a year before, and this has created many jobs in retailing, restaurants, hotels and other inland businesses.

Even before the holiday, companies were struggling to find the employees needed to keep assembly lines running. At many factories, white-collar managers and engineers were forced to spend time on assembly lines to meet deadlines before the lunar New Year, because laborers were in such short supply. The managers often struggled with the tedious but intricate tasks required to make everything from toys to DVD players. “People working in the office, like me, have been asked to help on the factory floor,” said Sky Niu, the Sales Manager at the Hengjia Electronics Company in Dongguan. “Of course, we can only help on the simpler tasks, such as packing.”

The labour shortage is not benefiting workers just through higher wages. Personnel managers here say they are also abandoning the informal tradition of not hiring anyone over 35 — they say they are now hiring workers up to 40 years old, and sometimes older, despite concerns about whether they can keep up week after week with the rapid pace of Chinese assembly lines.

It remains to be seen if Chinese factories will learn from their hiring difficulties now and be less quick to lay off workers during the next global downturn. The current system “is not stable, it’s not healthy,” said Han Dongfang, the Director of the China Labor Bulletin, a Hong Kong-based group that advocates collective bargaining.

Though the wage boost increases the prospect of inflation, it may have another more salutary aspect. The Obama administration has been pushing China to let the renminbi rise against the dollar, which would erode some of China’s formidable advantage in export markets. Rising wages in China have the same effect — while also giving Chinese families more spending power.

Letting wages rise benefits workers, said Jing Ulrich, the Chairwoman of China equities and commodities at J P Morgan. Letting the currency rise benefits currency speculators, she said. Liang, the 22-year-old plastics worker, said that he expected his pay to double in the next five years and added that he already had set his priorities.

“For sure, I want to buy a car,” he said. “Car first, then maybe marriage later.”

China’s plan to turn Shanghai into a leading financial centre by 2020 could be undermined by its ability to attract the talent it needs, as suggested by respondents to our latest poll.

By FinanceAsia Editors

This time last year, China's leaders announced plans to develop Shanghai into an international financial centre by 2020, but, with just 10 years to complete the transition, the city faces a skills shortage. In our web poll last week, FinanceAsia readers said that it is still far harder to hire finance professionals in Shanghai than in either Hong Kong or Singapore.

And the skills shortage is but one of the obstacles Shanghai must overcome to transform into a globally competitive financial centre, argue market participants. China's currency is still not freely convertible and the rule of law is perceived to be far weaker than in Hong Kong, Singapore or even Mumbai. The government's "direct and discretionary control over the national economy" is also a worry for foreign investors, according to Winston & Strawn, a US law firm that published a report last year on Shanghai's progress towards becoming a financial centre.

Our readers certainly agree. When asked which city is the hardest place to hire finance professionals, 65% voted for Shanghai, compared to just 19% for Singapore and 16% for Hong Kong.

Shanghai's market capitalisation is bigger than both Hong Kong and Singapore, but it still lacks the financial infrastructure to compete with them as a regional centre. Also, few foreign financial professionals are keen to move from low-tax jurisdictions, such as Hong Kong and Singapore, to a city where income tax rates are close to 50%.

But it rarely pays to underestimate China. "Judging by the government's ability to turn China into one of the world's leading economies within less than 30 years, there is certainly hope for Shanghai," wrote Winston & Strawn.

Male graduates get preferential treatment in their hunt for jobs, with a full nine percentage points more male university seniors having landed positions than their female counterparts as of the end of February.

A survey released by MyCOS HR Digital Information Co Ltd, a human resources consulting company in Beijing, shows that 30 percent of male university seniors set to graduate in July have found a job, while only 21 percent of female students have done so.

The survey also indicates that among the male students with offers of employment, 31 percent were hired by State-owned enterprises - traditionally the biggest employer of university graduates by far. Only 17 percent of the females were offered jobs at such companies.

In addition, female graduates in the sectors of transportation and logistics were offered 523 yuan less per month. Female majors in information technology and telecommunications were offered 420 yuan less than male students.

Li Xing, a former human resources employee in charge of recruitment at a State-owned real estate development company in Beijing told METRO that males are given hiring preference - 70 percent of the company's staff is male.

"We only considered women for the positions such as secretaries," Li said.

"Females are never considered for other positions, including construction supervisors, even though some of the female applicants were equally excellent as male counterparts."

He also admitted there was a small income gap between male and female employees doing the same job, but said it wasn't significant.

Wang Junjie, a consulting manager with the Beijing office of Towers Watson, a US-based human resources consultation, attributed the unpopularity of females in some workplaces to the nature of certain jobs.

Wang said male graduates are preferred in industries such as transportation and mining because overtime and frequent business trips are often required.

Male workers don't take maternity leave, he noted.

Furthermore, some companies may bear extra expenses if they hire female employees, according to Wang.

For example, if a real estate company hires a female quality control supervisor and she goes on a business trip with a male colleague, the company must pay for two rooms instead of one for their accommodation.

By KEITH BRADSHER

GUANGZHOU, China — Just a year after laying off millions of factory workers, China is facing an increasingly acute labor shortage.

As American workers struggle with near double-digit unemployment, unskilled factory workers here in China’s industrial heartland are being offered signing bonuses.

Factory wages have risen as much as 20 percent in recent months.

Telemarketers are turning away potential customers because recruiters have fully booked them to cold-call people and offer them jobs.

Some manufacturers, already weeks behind schedule because they can’t find enough workers, are closing down production lines and considering raising prices. Such increases would most likely drive up the prices American consumers pay for all sorts of Chinese-made goods.

Rising wages could also lead to greater inflation in China. In the past, inflation has sown social unrest.

The immediate cause of the shortage is that millions of migrant workers who traveled home for the long lunar New Year earlier this month are not returning to the coast. Thanks to a half-trillion-dollar government stimulus program, jobs are being created in the interior.

But many economists say the recent global downturn also obscured a longer-term trend: China has drained its once vast reserves of unemployed workers in rural areas and is running out of fresh laborers for its factories.

Since China does not release reliable, timely statistics on employment, wages are considered the best barometer of labor shortages. And temp agencies here in Guangzhou raised their rate for factory workers this week to $1.17 an hour, from 95 cents an hour before the new year holiday.

The rate was 80 cents an hour two years ago, before the global financial crisis temporarily depressed wages and demand.

The dearth of returning migrants set off a desperate scramble this week to recruit the workers who did step off long-haul buses and trains returning from the interior.

At a government-run employment center in downtown Guangzhou, employers seeking workers outnumbered job-hunters Thursday afternoon.

Outside, Liang Huoqiao, a 22-year-old plastics worker, joined a small group of men and women studying a 40-foot-wide list of companies seeking workers.

“You can walk into any factory and get a job,” he said.

The official China Daily newspaper said on Thursday that surveys of employers showed that one in 12 migrant workers was not expected to return here to Guangdong Province. Cities farther north along China’s coast are also running low on labor; Wenzhou alone posted a shortage of up to one million workers.

Guangdong provincial officials announced on Wednesday that they were considering increasing the minimum wage, which varies by city and ranges from $113 to $146 a month.

Higher wages could ease labor shortages by prompting factories to reduce their work forces.

But many factories already pay well above the minimum wage. They are wary of further pay increases because it is not certain they can pass the increased costs on to their customers — in particular, strapped importers in the United States and the European Union.

Rising wages suggest the re-emergence of a worker shortage that was becoming evident before the financial crisis. A government survey three years ago of 2,749 villages in 17 provinces found that in 74 percent of them, there was no one left behind who was fit to go work in city factories — the labor pool was dry.

Mass layoffs in late 2008 and early 2009 because of the global financial crisis temporarily masked the developing shortage of industrial workers. But two powerful trends were still working to reduce the supply of young people headed for factories.

For one, the Chinese government has rapidly expanded postsecondary education. Universities and other institutions of higher learning enrolled 6.4 million new students last year, compared to 5.7 million in 2007 and just 2.2 million in 2000.

At the same time, China’s birth rate has been sliding steadily ever since the introduction of the “one child” policy in 1977.

Labor shortages have returned quickly in recent weeks as these long-term trends have collided with a recovery in overseas demand for Chinese goods.

Far more jobs are available these days in China’s interior. Government projects like rail and highway construction have absorbed millions of workers, particularly after Beijing allocated nearly $600 billion to economic stimulus spending in 2009 and 2010. Consumer spending is also rising briskly; auto sales more than doubled last month from a year before, and this has created many jobs in retailing, restaurants, hotels and other inland businesses.

Even before the holiday, companies were struggling to find the employees needed to keep assembly lines running.

At many factories, white-collar managers and engineers were forced to spend time on assembly lines to meet deadlines before the lunar New Year, because laborers were in such short supply. The managers often struggled with the tedious but intricate tasks required to make everything from toys to DVD players

“People working in the office, like me, have been asked to help on the factory floor,” said Sky Niu, the sales manager at the Hengjia Electronics Company in Dongguan. “Of course, we can only help on the simpler tasks, such as packing.”

The labor shortage is not benefiting workers just through higher wages. Personnel managers here say they are also abandoning the informal tradition of not hiring anyone over 35 — they say they are now hiring workers up to 40 years old, and sometimes older, despite concerns about whether they can keep up week after week with the rapid pace of Chinese assembly lines.

It remains to be seen if Chinese factories will learn from their hiring difficulties now and be less quick to lay off workers during the next global downturn.

The current system “is not stable, it’s not healthy,” said Han Dongfang, the director of the China Labor Bulletin, a Hong Kong-based group that advocates collective bargaining.

Though the wage boost increases the prospect of inflation, it may have another more salutary aspect. The Obama administration has been pushing China to let the renminbi rise against the dollar, which would erode some of China’s formidable advantage in export markets. Rising wages in China have the same effect — while also giving Chinese families more spending power.

Letting wages rise benefits workers, said Jing Ulrich, the chairwoman of China equities and commodities at J. P. Morgan. Letting the currency rise benefits currency speculators, she said.

Mr. Liang, the 22-year-old plastics worker, said that he expected his pay to double in the next five years and added that he already had set his priorities.

“For sure, I want to buy a car,” he said. “Car first, then maybe marriage later.”

Hilda Wang contributed reporting.

By DANIEL H. ROSEN

While everyone is glad to put 2009 behind them, 2010 could be an even tougher economic year for China. To climb out of the global contraction, Beijing has engineered a property bubble characterized by oversupply in commercial real estate and unsustainable price gains for residential property. The consequences of this will bite in the new year.

To soak up and justify this excess, China's leaders are trying to stoke demand by accelerating the already epic urbanization trend, reducing constraints on migration and urban registration. The leadership is betting on the connection between accelerated urbanization and consumption, too. In 2008, 43% of China's population was considered urban, versus an average of 79% for Latin America, 73% in the euro area and 82% in the U.S: China still has a long way to go.

By front-loading this urban growth, China will bolster prices for upstream raw materials like iron ore and aluminum in the near term and keep construction companies busy. But many people are concerned that China's urban factories already are overbrimming with overcapacity in almost all sectors, and boosting urban migration will just aggravate overproduction, which will spill into world markets.

If China is already suffering overcapacity in everything, then indeed swelling the urban population would just exacerbate problems. But it isn't. In fact, there are huge swaths of economic activity and employment simply missing from the Chinese marketplace. Policies that address the reasons for this can create tens of millions of new jobs in traditional and new sectors in the years ahead, adding to domestic consumption and diverting the country from a collision course with its trading partners.

Consider three sectors: healthcare, manufacturing white collar, and education.

Healthcare: China has 1.6 doctors per thousand people; the U.S. has more than 23. Not that China wants to replicate everything about U.S. healthcare, but given rising pathology and mortality due to aging baby boomers, changes in diet, lifestyle, longevity and environmental contamination, filling this shortfall is critical. Reaching the U.S. ratio would mean adding almost 30 million doctors, not to mention multiples of the current low numbers of supporting staff—nurses, palliative-care specialists, hospital administrators and hundreds of other subspecialties comprising the modern healthcare sector.

Manufacturing White Collar: For all its storied manufacturing-sector prowess, China's goods makers skimp on R&D, quality control, brand management, financial planning, environmental-health safety and almost every other white-collar position that turns a manufactured commodity into a branded product and generates intangible value for the firm: value that makes up a third or more of assets in most Organization for Economic Co-operation and Development firms.

While China Inc. may have overcapacity on the assembly line, it has extraordinary undercapacity in the business functions that turn a $10 generic toaster coming out of a Chinese factory into a $75 Braun-branded toaster sold at retail in the U.S. or Europe.

China would need at least 60 million more white-collar workers to be comparable with the U.S. on this score. Given the different development levels, we might cut that in half, but 30 million missing office-worker bees is a lot of jobs.

Education: The missing-jobs number is also huge in education. China has 10 teachers per thousand people, as opposed to 22 in the U.S. Basic education for urban migrant-workers' children is a critical task if accelerated urbanization is to generate more prosperity and not just worsening income inequality, social tension and developmental problems like crime and an underclass. China currently needs another 16 million teachers to reach the ratio in the U.S., as well as attendant teacher-trainers, guidance counselors, school administrators, and other related employees.

Of course there are reasons why these jobs don't already exist.

In the case of healthcare and education, Beijing has chosen to save resources or transfer them to state-owned enterprises rather than make sufficient public expenditures, while simultaneously preventing private enterprises from investing in these areas as businesses. There are some low-price private hospitals and clinics in China, but with limited resources and market shares. In manufacturing, the cost of capital to build up white collar employment for private and SME firms is typically two-to-five times that of the low nominal rates heavier state-owned enterprises enjoy. And when they are able to build a brand and their own intellectual property, poor enforcement of regulations and intellectual-property protection jeopardizes their ability to recover their investment.

These three sectors just scratch the surface of new job potential: China is far from suffering "overcapacity in everything." The problem is that what is overcapacity doesn't create many jobs.

Steel, aluminum, cement, plate glass and upstream petrochemicals together create just 14 million jobs in a labor pool of 780 million, which is fewer than the number of service-sector jobs in Guangdong Province alone.

China's consumption-urbanization policy thinking is the right way to go, but only if policy simultaneously addresses the biases in the financial sector that starve job-creating sectors while larding other industries with capital. What China needs to make its urbanization strategy the solution rather than an unsustainable bubble machine, to put it simply, is affirmative action for labor-intensive industries.

Almost half of new expatriates leave China early because they have difficulty adjusting to the lifestyle, a consultancy firm said.

China Transition Institute (CTI) president David Israel-Rosen said most foreigners are unprepared for what life will be like when they arrive in China.

"It is moving from the West to the East," he said. "It is not like moving from Chicago to Denver."

"If you look at the literature, between 30 percent and 50 percent of expats go home early. The failure rates are astonishing."

Alan Kahn, vice president of marketing and communications for United Family Healthcare, said identity loss and depression are more widespread than many people realize.
"These are very real issues and they do have a significant impact," Kahn said. "It is very hard to ever fit in fully and that can cause lots of serious problems," he said.

Jessa Parkman, a 28-year-old nurse who recently arrived in Beijing from Baltimore said she misses her family and is worried about losing job skills she spent years acquiring if she cannot find a similar position here in Beijing.

"It is very debilitating to be at home and not be so independent," Parkman said. "I just feel very helpless at times and very dependent on other people. It is a struggle to get my bearings."

Last Saturday, Parkman and her husband attended expat boot camp, which is run by the CTI, and offers basic survival training for expatriates.

Cheryl Smith, a psychologist with International SOS China, said spouses of executives who have been assigned to China can have the hardest time adjusting.

"They feel a big emptiness and imbalance," Smith said. "I see a lot of alcoholism with expat women. I see a lot of depression. I see anxiety disorders and lots of marital issues."

"There are many who have marital issues," Smith said. "They don't have enough time with their partner and there are also lots of infidelity issues that I see."

Jasmine Keel, managing director of Inspired, a Beijing-based life and transition support company, said it is important to find an outlet for frustrations.

"It is hard when the spouse used to have a very strong professional identity. Maybe she was working so she had a professional world. Maybe she also had a very strong circle of friends so basically when she moved a lot of the world that she had disappeared," she said.

Helen Zhang, co-author of "Think Like Chinese," which explains Chinese thought and business culture from a Chinese perspective, said: "When you communicate with the Chinese, if you are open-minded and observant, there are clues you can pick up".

"There are many ways for Chinese to say 'no' even including 'yes,'" Zhang said. "We think totally differently."

Israel-Rosen said the CTI would expand the workshop to a week-long boot camp offered in a number of Chinese cities as well as abroad sometime early next year.

"There is nothing fancy about what we are talking about," Israel-Rosen said. ""We are talking about basic survival."

Source: China Daily

By Patrick O. Courtois

The Beijing Olympics have had a great impact on the city of Beijing, where a large infrastructure refurbishment initiative, fresh developments and a massive English language training campaign have been some of the elements of a drastic change and an amazing source of business opportunities for both local and foreign companies. Shanghai, with its upcoming Universal Exposition in 2010 is going through the same face-list, with the replenishment of the famous bund area, the accelerated infrastructure changes much needed to ease the megalopolis congestion problem and much more. Commercial opportunities are as well rising fast toward the May opening of the Exposition; opportunities that are being seized by both for local and foreign companies.

I have anticipated a rise in solicitaton from pavilion ran countries. Tendering processes are going on in most country having a pavilion presence, and many overseas third parties have, and still are, gotten in touch with me for solutions in search and selection of the pavilion staff, but most importantly staffing, enabling each pavilion to legally employ staff, local Chinese or foreign nationals, without having to establish a legal corporate entity in China. My firm being fully licensed and resourced for both activities it is of course a solution that we are capable of handling.

However what was not anticipated is the rise in solicitation from overseas SMEs.

Some the challenges faced by SMEs, while trying to seize their share of the tremendous financial and marketing opportunity the Exposition yields, can be briefly summarized as such:

• No local contact / connection in China
• No interest in forking out the additional cost, not to mention the lengthy process, of setting up a corporate legal entity for the limited duration of the Exposition (6 months)
• how to source bilingual and qualified employees locally
• how to legally employ local and eventually foreign national staffs during the Exposition period
• …

The opportunities are there, the challenges as well, but most importantly, solutions exist. Solutions that are legal, hassle free and well… affordable.

When you are operating an overseas SME, with a limited margin for error or financial flexibility, the process of establishing a commercial or operational presence in China can be seen as a daunting task. Entrusting a local business partner becomes therefore a viable solution, as you can stress-free focus on what you do best, that is sell and promote your products/services, while the local partner handles the “Chinese” side of things, like recruitment, employment, payroll, labor law compliance and so on, on your behalf.

Before signing up with a staffing company a few essential points are to be kept in mind:

• Do your research and make sure the firm you are engaging yourself with is LEGALLY LICENSED… that make sense, in the west at least, but I can guarantee you that a casual “sure, I can help” answer, here, is not what you should expect.
• Make sure they do have experience and references available for their staffing activities…
• Compare prices, as tariffs for staffing solutions can go from a few thousand US Dollars to a few hundred Chinese RMB from a firm to another, per month, for pretty much the same service level…
• Make sure that the firm has the INTERNAL resources to provide you with a pro-active and professional service. Too many firms around will be happy to take your money but will outsource payroll, contracts, … In China, quality is not always here while dealing with third parties suppliers…
• Foreign staffing firm versus Chinese firm? This is entirely your choice… but bear in mind that a foreign firm does not necessarily have the flexibility a local firm can have in terms of terms of quick fixes and might not be able to provide additional services like last minute lodging, visa and such… In addition, a foreign firm might have larger overheads and as such that might impact the quote you received.
• Finally, trust your guts. If the few emails you exchanged gave you a somewhat dodgy feeling or your primary contact gives of the sense of being “lost in Translation” at every phone conversation … walk away…

…or better, call me!…

Patrick O. Courtois is the Director of Operations at DaCare Executive Search, a leading executive search and HR services consultancy, based in the heart of Shanghai, China. (http://www.dacare.com/). Patrick has extensive management consulting experience in Asia, as well as European markets. With a current focus in executive talent sourcing in Greater China, Patrick engages with multinational clients in professional services, hi-tech communications and industrial manufacturing. Visit Patrick’s HR blog at http://hrshanghai.blogspot.com/.

As a business innovator, China has a wealth of advantages. These include a huge, adaptable population with an affinity for improvisation and reverse engineering; low-cost labor, operations and overhead; and mature industrial clusters ready to supply a variety of parts, components and subassemblies. These elements are creating a strong culture of innovation, one that companies from developed economies soon will either profit from, or compete against, as China moves beyond labor-intensive, low-value-added consumer goods.

Already, many large multinational corporations (MNCs) have set up R&D centers in China, and the government is encouraging the development of design capabilities among its workforce. But China is not an easy place for outsiders to be innovators. Companies from developed economies looking for R&D partners in China must learn to operate within an industrial structure quite different from their own, and take great care in selecting whom to work with and how, experts caution.

MNCs are likely to find that the best opportunities for harnessing Chinese-style innovation lie in two areas: discrete, targeted pieces of larger products and products for home-market consumption.

In this article, part of a special report on Chinese manufacturing, experts from The Boston Consulting Group (BCG) and Wharton look at how companies can profit from Chinese innovation, what drives this innovation, and what challenges they face in sourcing R&D in China.

Global Recession's Role

Jim Andrew, a senior partner and managing director in BCG's Chicago office and head of its global innovation practice, says that in the current recession, companies need to ensure that they are getting full benefit from every dollar they spend -- including their investments in innovation. Andrew sees growing innovation in low-cost countries such as China and India as one way for companies to increase the cost-effectiveness of their innovation spending. "The crisis in the developed markets has accelerated the move to developing markets because they are lower-cost and now have a track record," he says, noting that the changes afoot are redefining the innovation landscape. "We will look back on this time and say it was an inflection point with regard to the speed at which certain innovation activities were scaled up in China and India in particular. There is really a step-function change in the rate at which some of these activities are growing."

Innovation in China before its economy opened up was limited to design institutes that were part of government departments, says David Michael, a senior partner and director of BCG's Beijing office. Some of institutes have since been repurposed for new commercial goals. Such is the case with the state-owned oil company PetroChina, which has a large network of design institutes within it, according to Michael.

MNCs now realize that China has tremendous development capabilities, including the ability to size up opportunities and rapidly bring products to shelves at low cost. The availability of well-educated talent is particularly attractive, Andrew says. "You can access that talent to do a lot more of the 'R' (research) that is increasingly relevant not just to China's domestic markets but to developed markets." For MNCs that set up R&D centers in China, "It is more about accessing talent rather than some unique source of innovation," Michael notes. That makes innovation in China substantially different from that in other global hubs such as the Silicon Valley. "There is low-cost engineering talent in China, but that's different from saying that there is a whole fountain of innovation we can tap into," he adds.

This raw engineering talent is a valuable resource for companies from developed economies. The best way for MNCs to tap into Chinese design skills is by sourcing select pieces of their product, Michael says. As is true for contract manufacturing, much of the advantage of Chinese R&D is in low-cost labor -- but for brains, not brawn. "When Western or world-class business practices line up with low Chinese costs, new types of companies develop to take advantage of this opportunity," he notes.

In health sciences, for instance, some Chinese companies are already responding to Western research needs with low-cost services. Michael offers WuXi PharmaTech in Shanghai's Waigaoqiao Free Trade Zone as an example. WuXi, a leading provider of contract research work for the global pharmaceutical industry, has become adept at setting its engineers to work on Western pharma projects. "It's run by people who understand the needs of Western pharmaceutical companies and know how to leverage local engineering talent to do the work."

This kind of division of labor is common in such East-West partnerships. Western companies typically tap into Chinese design for parts or modules, Michael says. One global energy company gets "a lot of its design for oil exploration and drilling facilities in China at the local oil companies' design institutes," he notes. Microsoft and other Western and Korean gaming and software development companies have a network of local software developers. Michael also points to Perfect World, a Chinese gaming software writer that "is booming in the 3-D world." It may not be a household name in the United States or Europe yet, but Perfect World is a leader in the country's online game market, according to Morgan Stanley Research.

Development Attitude and Disruption

Such industry specialization is common. Corporate R&D in China tends to focus on specific industries and on product development rather than basic research, says Marshall Meyer, a Wharton management professor whose research focuses on China. "You see successes in China in machine tools and lasers, but it has been a combination of development and marketing more than basic research."

Chinese companies have been good at the "D" (development) part, Andrew says. "You could grow very large very quickly by playing in existing markets if you developed new products that were just a little better than everybody else's. But with increased competition everywhere, it takes products and services that are more innovative and targeted to needs that are not already being met." One recent example is a soybean blender that produces a popular soy milk drink. Joyoung Co. in Jinan, China's Shandong province, manufactures the blender, which has become "a big hit product." The blender has no fancy technology -- just a plastic body with an electric motor, but its "fundamental concept is what local consumers want," he says.

More dramatically, according to Michael, Taiwanese computer manufacturer Asus used its development capabilities to "single-handedly invent the netbook segment of the PC market." Producing computers stripped down in functionality and priced at $300 each, Asus "has completely disrupted the global PC market."

As existing markets become saturated, however, China must invest more in the "R" part of R&D to compete differently or to expand into fundamentally new markets, Andrew says. And while piracy has eroded profit opportunities in China's traditional gaming software industry, Michael points out that it has not similarly affected online games. "People are paying for the experience of playing games with each other, and that turns out to be profitable despite some piracy."

Longer-term, the capacity to innovate seems likely to grow. "The culture is very, very good at devising quick and often effective solutions to problems," Meyer explains. "I see a lot of improvisation." An increasing demand for a Chinese language card in computers, for example, prompted Lenovo years ago to create one for its products. Chinese white-goods manufacturer Haier found that potato farmers in China were using their washing machines to clean produce, so it designed a heavy-duty, special-purpose machine that can be used outdoors and will "wash your clothes or your potatoes," Meyer notes. Electronic and electrical manufacturers often design products that work with "very heavy-duty power supplies because of the poor quality of electricity" in the country.

Nor are Chinese innovators focused entirely on their domestic market. According to David Jin, managing director and head of BCG's Shanghai office, some Chinese companies have already tried to out-innovate large MNCs -- and succeeded. In one highly publicized case in 2006, Chinese electrical products maker Chint won a lawsuit over its patent for a circuit breaker against the Chinese unit of the French company Schneider Electric. "Usually, it is the other way around," Jin says, alluding to Western companies accusing those in developing countries of patent infringements. Many high-tech operations are succeeding abroad as well. China Medical Technologies, a supplier of in-vitro diagnosis and treatment systems, competes with MNCs and commands a market share of more than 90% in at least one product segment and 70% in another, according to a July 2008 report from Citigroup Global Markets.

Choosing a Business Model

For companies in developed economies that want to harness Chinese innovation, Wharton and BCG experts say it's important to select the right business model. These models range from plain-vanilla purchasing through a series of one-off orders, to joint technological collaborations through supplier development programs, to taking an equity position in Chinese suppliers, says David Lee, partner and managing director in BCG's Beijing office and a supply chain and procurement specialist.

No one-size-fits-all formula exists for such partnerships, Lee adds. He has seen several MNCs invest in their suppliers, but "a lot of them don't like the idea," in part because of potential management disagreements. Some Chinese companies "are reluctant to change the way they have worked historically," he says, adding that the handling of human resources and material waste, in particular, could be points of friction. However, many of them have begun reining in waste of materials in manufacturing processes and increasing wage levels have got them to focus on lean manufacturing and productivity enhancement, he adds.

Many MNCs have rolled out supplier development programs, transferring pieces of technology and attempting to transfer their best practices to Chinese partners. But this, too, is unfamiliar territory for some. Companies from developed economies typically haven't had to worry much about quality control in their home markets "because suppliers themselves take the initiative to invest in quality-control processes," Lee says.

Markets are so competitive and dynamic in China that innovation is likely to continue relentlessly. Companies are being pressured for ever more gains in productivity. And where Chinese manufacturing wages were relatively flat for many decades -- allowing wage productivity to grow -- labor markets have tightened and wages have started rising, Michael points out.

The challenge going forward will be to accelerate productivity growth ahead of any inflationary pressure on wages, he says. The available labor supply in the medium term will not be as large as it was in the past -- although the global economic slowdown has idled millions of workers for the moment. But the release of large blocks of talent through the restructuring of state-owned enterprises is almost complete. At the same time, rising farm incomes -- at least until very recently -- had constrained the supply of migrant rural labor to the industrial centers, Michael explains. That gave labor more leverage. Ultimately, as labor increasingly absorbs more manufacturing resources in the long run, companies will have to push even further for innovative solutions with "a focus on driving more productivity increases in Chinese operations." The global economic downturn will likely slow the pace of these trends -- and even reverse some -- in the short term. But over the mid-term and beyond, expect China to build upon its already substantial innovative capabilities in manufacturing and services.

Innovation and Intellectual Property

Does porous intellectual property protection have a negative impact on r innovation? Not necessarily, says Harold Sirkin, senior partner at BCG in Chicago and global leader of the firm's operations practice. When you innovate, "you're creating a brand, and that's a different kind of intellectual property (IP) than a patent." IP protection is growing less important to innovation, even in the West, Sirkin notes. "The world has gotten so small that even if you invent the next iTunes, you can't rely on patent protection," he notes. "It's readily copied now, everywhere. A lot of the [market appeal with] iTunes and the iPod is about [their] installed base."

However, innovation and protection of IP have long been connected, and China has duly noted that linkage in its attempts to transform itself from a low value-added manufacturing center to recognized innovation leader, particularly as lower-cost countries compete for China's core business. Mike Chao, a Principal at BCG in Beijing, notes that, "The IP laws have always been there, but what's changed in the last 20 years is how they have been interpreted and enforced. There's a big difference between policy and enforcement." One notable example is the software industry, where Chao battled piracy with Microsoft China for over five years before joining BCG. After strong lobbying by Microsoft in partnership with the US government, China declared in 2003 that the government would only use legal software. That announcement was followed by two additional decrees requiring that PC manufacturers only preinstall genuine software and Chinese enterprises only use legal software. "While that's absolutely a step in the right direction, there's still work to do in terms of bringing up the levels of enforcement and awareness to comply with the policies," Chao says.

On another front, however, he notes the Chinese government's tendency to provide research grants to projects that have the same time frame as the tenure of bureaucrats, thus sacrificing long-term horizons for short-term gains. "Innovation requires a long-term approach, and companies need to know their hard work won't just be stolen right away." Therein lies the difference between betting the company on the "R" or the "D": "Research is never a sure thing, but development can consistently result in realizable output," Chao explains. "With the recently announced government stimulus programs, there is hope that more funding will go to the companies that can actually productize that research and bring it to market." Academic institutions that have traditionally received such grants have "not had a great track record in commercialization," Chao points out.

Evolving IP policies, however, will not necessarily be the savior to spurring a wave of innovation in China. "At the end of the day, the market will force you to innovate and differentiate, and if your company isn't doing that, someone else will." Chao points to the PC industry as an example. Prices of notebook computers dropped 13% on average in China last year, in large part due to pressure from netbooks, other low-cost offerings, and a general lack of differentiation. "Asus saw an opportunity to disrupt the industry with the netbook, and now PC companies are dropping prices and scrambling to catch up." Innovation is and has always been the key to competition. China's ability to do so effectively will undoubtedly determine its future in the global economy.

Source: Knowledge@Wharton

BEIJING (AFP) — The number of labour disputes in China have soared amid the global financial crisis as laid-off employees seek salaries owed to them by suddenly defunct companies, state press reported on Wednesday.

A total of 98,568 cases involving labour disputes were filed in Chinese courts in the first three months of 2009, up 59 percent year on year, the China Daily said, citing figures from the nation's supreme court.

"Amid the global financial crisis, the number of businesses going into the red or going bankrupt continues to grow, leading to more disputes over salary claims," Du Wanhua, a top official with the court, was quoted as saying.

Du said the rise was also likely due to the introduction last year of a labour contract law that provided a more solid legal footing for complaints and increased workers' awareness of their rights.

The newspaper said the increase followed a 93 percent surge in such cases in 2008 to 286,221.

Chinese officials have repeatedly warned of the potential for widespread unrest if unemployment continues to grow.

The World Bank last month forecast China's economy would grow 6.5 percent in 2009.

That would be its slowest expansion in nearly two decades and well below the eight percent level that Chinese leaders say is needed to keep enough people in work and to avoid unrest.

The economy, which grew nine percent in 2008, has slowed sharply amid the collapse of overseas markets for China-made goods due to the world economic downturn.

Thousands of factories and other businesses have failed in recent months, throwing millions out of work and leading to protests in some areas as angry workers demanded back pay owed by failed companies.

In this excerpt from the McKinsey Quarterly, the authors discuss ways some companies are successfully navigating the country's skilled-talent shortage.

How to Address China's Growing Talent Shortage

The imbalance between business opportunities in China and qualified executives to manage them will get worse -- a lot worse -- before it gets better.

By Kevin Lane and Florian Pollner

The growing need for talented managers in China represents by far the biggest management challenge facing multinationals and locally owned businesses alike. In a recent AmCham Shanghai survey of US-owned enterprises there, for example, 37 percent of the companies responding said that recruiting talent was their biggest operational problem -- more than the number who cited regulatory concerns, a lack of transparency, bureaucracy, or the infringement of intellectual-property rights.

Separately, 44 percent of the executives at Chinese companies surveyed by The McKinsey Quarterly reported that insufficient talent was the biggest barrier to their global ambitions. ...

Continued strong economic growth in China over the next several years will further fuel demand for good people. Mature economies too face a growing talent gap because of longer-term demographic trends such as lower birth rates and the retirement of the baby boomers. Leading multinationals in these countries therefore increasingly compete globally to find talent, intensifying the problem still more.

On the supply side, the gap is widening at all levels in China. For entry-level corporate positions, there is an ongoing mismatch between the sort of graduates most Chinese universities turn out and the type of candidate who would interest local and regional companies, to say nothing of multinationals. People who prove themselves effective will have increasingly high expectations of their current employers, and if those expectations aren't met they may easily be tempted by lucrative rival offers. The market for experienced hires is even more challenging, especially when international experience beyond China and Asia is required.

Local companies and multinationals therefore increasingly fish in the same small pond of high-potential graduates and experienced managers with the right functional capabilities, leadership potential, and language skills. Many local companies are willing to match or exceed the multinationals' compensation packages.

Companies that are successfully addressing the talent challenge in China stand out in a number of ways, including their ability to localize techniques that have worked in other parts of the world.

The most effective companies have a clear strategic view of their talent needs four to five years out, identify gaps at all levels of the organization, and segment their executives carefully. They develop and operate both a sophisticated external-recruiting machine and an internal-development and -training program adapted to the local Chinese environment.

Integrate strategic planning and talent planning. In the past, the world was short of capital and innovation but rich in talent, which was therefore a second-order consideration in defining corporate strategies.

In China today, by contrast, a leading company is likely to think of talent as a key input. A superior understanding of the available talent pools -- and a realistic assessment of the company's ability to attract and develop talent from them -- shapes its strategic choices.

Know what you need -- it may not be what you think it is. Top companies segment their talent base with the same effort and care that a top marketing department employs to segment its customer base.

That means making projections, based on corporate strategy, for perhaps four or five different salary grades and tenure groups, taking into account the expected number of internal hires, promotions, and likely attrition rates.

Given the rapid rate of change and the likelihood that new assumptions about issues such as employee turnover will have to be built into the model, these targets should be reviewed at least twice a year.

Companies should also define the types of functional capabilities they must build and identify the specific types of leaders they will need -- for example, "business builders," who can lead enterprises into new regional markets, or "execution drivers," who can instill discipline in performance.

The functional skills and leadership abilities required in China will probably differ from those called for in developed markets ... .

Managers in China might, for example, need to know more about simplifying or tailoring products, finding low-capital solutions, and managing alliances and government relations. A higher level of comfort with ambiguity or greater cultural openness may be necessary as well. Companies in China must therefore be prepared to recognize and address the difference between their talent needs in that country and in the rest of the world.

A stronger -- and sharper -- focus on talent. In China, any company's local management committee should make talent a standing item on the agenda. The top team ought to review important initiatives every two or three months and invest time in devising efficient processes to gather data from factories, in making specific people accountable for acting on talent issues, and in setting and revising targets.

Senior executives need to take this responsibility personally by devoting significant and highly visible time to talent rather than assigning the problem solely to human resources (HR), and they must apply as much rigor and intensity to recruiting, developing, retaining, and allocating talent as they do to financial planning. We often find that companies ignore some of these basics, treating talent as a "soft" issue and thus ignoring its very "hard" financial impact.

...

Longer, stronger pipelines. University recruitment is a key element in the talent strategies of multinationals and local Chinese businesses alike. It requires a highly tailored approach to partnerships with institutions of higher learning, as well as a careful analysis of the top-tier schools, schools with a strong national reputation, and those with solid regional or local standing. (We often find that some of the most successful -- and loyal -- recruits can be found at universities close to the places where jobs open up.)

Recruitment efforts should begin with a rethinking of a company's brand attributes and value proposition for Chinese graduates, whose attitudes on these issues often differ from those of their counterparts elsewhere.

Companies have a number of ways to establish a reputation on campus, and all must be explored -- for instance, sponsoring a lecture or university chair, hiring student interns during summer vacation, and forging relationships with faculty members to support research. In other markets with similar talent challenges, companies and trade associations have even set up their own schools and universities to alleviate the scarcity of suitable high-potential entry-level talent.

Companies should build a portfolio of relationships with universities, aiming for close ties (developed by a specific team) with a few institutions and for looser links to a number of others. An important objective of these relationships should be to identify talented people at a much earlier stage than companies elsewhere might consider appropriate -- as early as the second year of college.

IBM, one of the corporations now building strong bridges to education in China, has formed partnerships with several Chinese universities, donated millions of dollars to educational institutions across the country, and collaborated with the Ministry of Education to improve the teaching and curricula at Chinese universities.

Do-it-yourself development. Since the tight talent market routinely fails to provide candidates who have the right skills and leadership qualities, leading companies build training and development programs and put them at the center of hiring and retention. Global policies and programs may not work; companies in China must tailor them substantially to the mind-set of a highly willing but often relatively low-skill talent pool that nonetheless expects a fast track to senior levels and substantial responsibility.

Employees therefore ought to have clear development paths, which may include unusually fast promotion to intermediate tiers of responsibility, such as assistant brand manager. Apprenticeships and mentoring can promote both learning and commitment, and training should take place in the context of real work as much as possible.

P&G, which uses these tools very effectively, has built one of China's strongest talent engines, with a high degree of localization. At Motorola, employees can benefit from such tailored offerings as the China Accelerated Management Program, for promising local managers; the Motorola Management Foundation Program, to train new managers in such areas as problem solving and communication; and the Motorola high-tech MBA program, a partnership with Arizona State University and Tsinghua University, which allows high-performing employees in China to earn an MBA in house.

Proactively building the basics is no less important; many Chinese companies either lack the evaluation systems, feedback loops, and other mechanisms regarded as the minimum level of best practice in the West, or they implement them poorly. Companies should not only build these processes but also train employees to manage them effectively (explaining, for example, how to set expectations unambiguously and to have meaningful feedback conversations).

Not the usual suspects. Given the pace of growth in the number of qualified senior managers and the time required to develop them, external recruitment ought to be a regular part of the talent solution in China. Companies should look beyond their own sectors for experienced leaders by identifying industries that have faced analogous challenges, such as similar distribution structures or regulatory barriers.

Often, the types of experiences managers have under their belts indicate their potential more accurately than do the industries where they work. When a top company identifies the key types of leaders it needs, across the ranks, it can define the background, experience, and qualities it wants them to have. Going beyond the usual suspects becomes easier: a company can then methodically identify situations, industries, and companies that have exposed managers to the specific types of experiences it requires.

Turning challenges into opportunities. China poses the dual challenge of aggressive business-building goals and an insufficient pool of talent to achieve them. Top companies turn this challenge into an opportunity by using major initiatives as a chance to develop new leaders from within and to bring experienced leaders recruited from the outside up to speed more systematically.

This approach does require a willingness to give relatively inexperienced people responsibility for major initiatives but can also help companies to develop leaders and capabilities more quickly. The keys to success include matching the right people to the right initiatives, ensuring that the initiatives are truly important, and providing the right support -- to build both leadership and functional skills -- so that leaders emerge in a "just in time" fashion.

Comprehensive and consistent. Our suggestions address critical aspects of the talent problem in China. But to be effective, they must be integrated tightly with other elements of a company's operations and organization, including its corporate culture and HR processes.

Employees expect a company's stated mission, values, and talent policies to hang together consistently; companies that value entrepreneurship highly should reward it highly, for example. This kind of alignment is a distinct challenge in a market where many employees, including managers, are relatively new to the companies they serve.

Companies in China must therefore revisit their HR policies and processes to ensure a good fit with the peculiarities of the changing local talent market; retention policies, for instance, should reflect the priorities of Chinese employees (such as whether they tend to leave for money, advancement, or better learning opportunities), and internal talent markets should be as vibrant and exciting as the external one.

The broad principles of managing talent in China may not differ much from those prevailing in other markets, but the extreme imbalance of supply and demand, coupled with the rapid pace of change in both the corporate and social domains, poses a distinct challenge. Companies hoping to compete successfully in China must raise talent to the top of the agenda. Those that get the solution right will create a real source of competitive advantage.

Many who migrated to the U.S. are returning to an economy that offers richer career opportunities.

By David Pierson and Don Lee
February 24, 2009

Reporting from Shanghai and Los Angeles -- Xun Jia, a doctoral candidate in theoretical physics at UCLA, expected to find a job on Wall Street crunching complex financial formulas upon his graduation.

But after meeting with 10 recruiters to no avail, the Chinese native is looking for new opportunities -- in the country he left behind.

"I'm definitely considering moving back," said Jia, 27, who always envisioned himself establishing a career in the U.S. first but is now firing off his resume to contacts in China. "They need people to go back."

The Chinese government is counting on people like Jia -- nicknamed "sea turtles" because they journeyed across the ocean and then came back -- to help retool its economy and find paths to expansion beyond the cheap exports on which the country has relied for so many years.

Late last year, the government launched an aggressive campaign to lure them back and is spending millions to entice accomplished investors, bankers, researchers and engineers to come home.

During a 10-day series of job fairs in December, Chinese banks, universities and government agencies interviewed more than 4,400 people in London, Chicago and New York.

The southern city of Guangzhou has created a $30-million fund to attract overseas financial professionals and along with the city of Shenzhen is considering a multicity recruitment tour of the U.S. this summer.

The economic boom that lighted up China in the last decade had already served as a beacon to many expatriates, drawing thousands home from the U.S. and other places.

A record 50,000 Chinese students who studied abroad returned to China last year, an increase of 6,000 from the year before and more than double the number in 2004, government statistics show.

Though there are no official data, the presence of returning Chinese expatriates and foreign-born ethnic Chinese in China has grown over the years, experts say.

In Shanghai, about 4,000 businesses are said to have been founded by returned students, amounting to more than $500 million in investment, Chinese state media have reported.

Charles Zhang, the founder of one of China's largest Internet portals, Sohu.com, was educated at MIT. At the prestigious Chinese Academy of Sciences, 80% of the faculty studied abroad, as did more than half of those at the Chinese Academy of Engineering.

"You can find most things you were used to in the U.S. in Shanghai now," said Greg Ye, a graduate of Harvard Business School who returned to found NewMargin Venture, a private equity fund. "I feel like there's lots more opportunity here."

With the global recession slowing the economy to levels last seen in 2002, the Chinese government wants even more of those living abroad to come home in the next few years.

"They want to send a positive message that the government is forward-thinking" by looking overseas for help, said Clay Dube, associate director of the U.S.-China Institute at USC. "That's the political and public relations side of it. Then there's a real recognition that moving forward, you're going to need these folks."

Senior executives in Shanghai's financial industry said the interest was so high that they alone carried 330 pounds of resumes from the job fairs back with them.

Although it's unclear how successful the recruiting campaign will ultimately be, financial firms in Shanghai did recently offer jobs to 53 candidates as a result of the fairs, according to Caijing, an influential Chinese business magazine.

State media also reported that Chinese automaker Futian is eyeing laid-off workers in Detroit, hoping to hire about 10 specialists in research and development, production and sales.

The confidence with which China is courting its diaspora reflects the vastly changed attitudes about the country's prospects since the economy started to flourish in the 1990s.

In earlier years, many Chinese students preferred to stay overseas while China was still struggling to transition out of a state-dominated economy. A generation of students in the U.S. were helped along by the asylum granted them after the Tiananmen Square crackdown of 1989.

But with China's economic boom over the last decade, the idea of moving back became increasingly palatable and, in many cases, attractive to the ambitious.

Multinational corporations opened offices, entrepreneurs broke ground and living standards soared in the metropolitan areas along the coast.

"The younger generation has no hesitation going back," said Henry Zhang of the Chinese Finance Assn., which helped organize a recent recruitment fair in New York. "I think it's a permanent shift."

Zhang, of Mountain View, Calif., is part of the older generation. He left China to study physics at the University of Texas at Austin in 1989 carrying all of $245. He knew that heading to the U.S. and staying there offered him the most opportunity.

"Before, you would go to America and never look back," said Zhang, 45. "You had no regrets. You just had to march forward."

Now, Zhang says he has the best of both worlds. He travels to China frequently to teach investing at an international business school.

He has turned down full-time job offers in China because he thought it would be too difficult for his family to leave America.

Shanghai, the primary destination for those returning, is looking to seize opportunities created by the global downturn to build an international financial center rivaling those of Hong Kong and Singapore.

Recruiting events now occur regularly. In a low-key affair at the end of December, a group of sea turtles invited 65 people from overseas to spend two days at a Marriott hotel in the Pudong district, China's financial hub and home to Shanghai's stock exchanges.

The event was supported by the Pudong government and gave bank executives and agency officials a chance to mingle with people like Will Lu, a Hacienda Heights resident who works for a merchant banking firm out of Los Angeles.

The 34-year-old native of Shanghai, who graduated from USC's Marshall School of Business, says he was there to network with key people in government and business.

"As in Wall Street, you have to know someone to get into the industry," he said.

The Pudong event was Lu's third such recruiting session in China in a month. The others were in Beijing and Guangzhou.

When Lu left China in 2001, he remembers, he and his friends were drawn to the U.S. and its opportunities. That attraction is still there, he said, but the financial crisis has accelerated a shift to the East.

"The focusing point of the world," he said, "will be changing to China."

BEIJING: Labor-related lawsuits nearly doubled in China last year mainly due to mass factory shutdowns, a senior official with the Supreme Court said.

A manufacturing powerhouse, China's factories were hard hit when overseas demand for their exports evaporated in the wake of the global financial crisis.

Shen Deyong, vice president of the Supreme People's Court, said at a news conference Monday that the number of labor-related lawsuits filed in 2008 jumped 95 percent, marking the biggest on-year increase of any type of suit.

He said most of the cases were filed in the country's coastal southeast, home to a string of factory hubs. In some areas, labor suits increased about 200 percent compared to 2007, he said, without giving specific figures.

The spike in labor lawsuits was "closely connected to businesses slumping and factories being shut down," he said.

"When they face difficulties, these businesses often reduce their costs by cutting the labor force and salaries," he said.

He said a new labor contract law that came into effect at the start of last year and rising public awareness of worker's rights also contributed to the rise in cases.

Unemployment is a major concern for China's communist leadership because of fears it could trigger social unrest and demands for political reform.

A comprehensive survey of labor to be launched by national statistic authorities this year is badly needed to replace the current unemployment data that covers only urban residents.

As the deepening global financial crisis and domestic economic woes tightens the employment prospects of millions of migrant workers and college graduates alike, the narrowly defined urban-registered unemployment rate can no longer provide the accurate information needed by policy makers.

Though the Chinese economy significantly slowed down later last year, the official unemployment rate released quarterly by the Ministry of Human Resources and Social Security showed only a mild climb from 4.0 percent a year to 4.2 by the end of 2008, with the number of registered jobless urbanities standing at 8.86 million.

Compared with the 11.13 million urban jobs that the country created last year, such a 0.2 percent increase in unemployment did not really deliver a sense of urgency.

It was only when another government survey revealed that 20 million migrant workers lost their jobs before the Chinese lunar new year that the country was awakened to a grave reality.

The Ministry of Human Resources and Social Security recently estimated that the urban unemployment rate could reach 4.6 percent this year, the worst since 1980. But that figure is obviously far from enough to highlight the severity of unemployment pressure.

On one hand, salaries of migrant workers contributed about 40 percent of rural families' income, so their job losses will make a huge dent in farmers' income growth.

On the other hand, some 7.1 million university graduates, too, are expected to have a hard time this year as the number of new jobs falls in cities.

The Chinese authorities have urged governments at all levels to make every possible effort to expand employment.

Nevertheless, if they want to come up with adequate policy responses, they first need to have a firm grip on the problem they're trying to address.

Therefore, statistical officials should do their utmost to ensure the success of the comprehensive survey of the labor force that they will conduct in four municipalities and more than 20 provincial capitals this year before extending it to the whole country in 2010.

Chinese firms are continuing to hire managerial staff despite the economic slump, with media professionals and accounts in most demand, an international poll has found.

Recruitment has remained relatively strong in China, with 43 percent of businesses taking on managerial personnel, according to a quarterly survey by Antal International this month.

The figure is expected to fall to 20 percent next quarter but the number of companies letting staff go will also drop, keeping the market stable, the survey said. "The global financial situation has certainly had an effect on the jobs market here, but conditions are still relatively strong," said Robert Parkinson, who runs Antal's operations in China.

"Hiring activity is down from the last quarter but at the same time so is the number of companies firing managerial staff," he said. "It suggests organizations are still looking for new talent but with caution, waiting to see what happens in the coming months."

The media, particularly for those with IT and Internet technical knowledge, is a strong employment area, with hiring expected to rise to 60 percent in the next quarter and firms laying staff off set to drop by 7 percent.

"The demand for IT and Internet media professionals reflects a demand in distant communication through technical assistance, a result of companies cutting traveling budgets during the economic slowdown," Parkinson said.

Hiring rates for accountancy firms plunged from 96 percent last quarter to 57 per cent, but sackings will fall from 27 percent to 7 percent next quarter, the survey said.

Automotive companies are expected to fire more people, with a predicted rise from 13 percent to 20 next quarter, while hiring dropped from 86 percent last quarter to 37 and is expected to fall again to 23 percent next quarter.

In banking "hiring has seen a rebound", says Parkinson. The economic crisis highlighted the importance of managing personal wealth, resulting in a lift in private banking and risk management services, he said.

(China Daily February 9, 2009)

As layoffs and labor disputes become frequent with the global economic slowdown wiping out more businesses, the central government yesterday told employers to inform trade unions of their plans of mass layoffs at least 30 days in advance.

If a company plans to layoff more than 20 employees, or over 10 percent of the total staff in one go, it must submit written reports to the local labor and social security department 30 days prior to the action, the State Council said in a statement issued on its official website (www.gov.cn) yesterday.

The State Council emphasized that priority should be given to ensure the legal rights of the employees.

Moreover, employers should not refuse to pay for social insurance as long as the working relations still exist, it said.

Local labor officials should keep a watch on such companies to ensure employers do not flee or postpone wages and insurance payment, it said.

Mo Rong, deputy chief of the labor science research institute under the Ministry of Human Resources and Social Security, said stable employment should be the top priority under the current financial circumstances.

"In the long term, mass layoffs are not good for the development of an enterprise," he said.

The government has launched a series of favorable policies "to either reduce or postpone five types of social security insurance fees to give private enterprises some relief", he added.

"The State Council's notice reiterated the regulation of Labor Law, and it is a good reminder to both enterprises and employers," Li Kui, a lawyer of the Beijing-based Yingke Law Firm, told China Daily.

"But I hope the regulation would be further clarified, as different scales of companies and official organizations that manage layoffs need to be more clear," he said.

Meng Qinghuan, an employer of a Beijing-based fund management company, said he was doubtful if the new regulation would be implemented successfully.

"Some small enterprises have no ability to anticipate the crisis and go bankrupt overnight," he said.

China's ruling communist party has already seen its economic miracle knocked off course by the downturn in global trade and now the government is faltering on another cornerstone of its plans to modernize the country by developing the rule of law.

Amid mounting job losses and factory closures, Beijing has made dealing with the immediate economic crisis priority number one and that means some longer-term plans such as improving labour laws have been sidetracked.

"China's leadership is clearly wavering on what they want to do," said Andreas Lauffs, a Chinese labour law expert at Baker & McKenzie in Hong Kong. "Is it rule of law or is it ad hoc policies?"

Last year, Beijing enacted a new Labour Contract Law that was seen by many as a landmark designed to protect workers and clarify the rights of employers too. The new laws were also seen as part of a wider trend toward a more modern system of commercial laws that included improving patent laws and rules on mergers and acquisitions.

But those developments could be in jeopardy as the government diverts its attention to righting the country's wavering economy that has slowed to its weakest growth in years, largely because of the sharp decline in global trade.

Faced with massive unemployment -- latest official estimates released Sunday indicate 20-million migrant workers have been laid off since the downturn began late last year -- Chinese authorities are apparently showing flexibility and inconsistency on the enforcement of the new laws.

For instance, provisions on mass layoffs were recently rewritten so that firms looking to lose 20 people or 10% of their workforce must get approval from local authorities. "Effectively they are saying collective dismissals are not encouraged," Mr. Lauffs said. "They are asking employers to reduce payroll, change working hours, do whatever they can to avoid collective dismissals. The government doesn't want large numbers of people unemployed, they don't want labour disputes, they don't want people marching in the streets."

Meanwhile, some provincial authorities have introduced measures that undermine the prosecution of wrongdoing by influential business owners. In January, officials in Guangdong province -- home to a third of China's export sector -- declared that company owners suspected of breaking the law should be "handled prudently" so as to avoid disrupting business activity wherever possible, according to state media.

The Guangdong guidelines were mimicked by other local governments in areas hit by the downturn in the economy. But the local authorities also drew fire from official news agency, Xinhua News, which said in a op-ed piece last week that the policy is "inadvertently creating loopholes to allow crooked magnates to hide evidence of their wrongdoing."

The Xinhua report continued: "Keeping jobs, and thus social stability, is a valid concern during hard times. But is equality before the law to be the price for this stability?"

Beijing also faces some embarrassment over a World Trade Organization ruling last week that backed the United States in a case related to China's efforts to protect and enforce international copyrights and trademarks. Washington had said China failed to provide proper patent protection for imported products and challenged what it called shortcomings in Chinese copyright laws. The Chinese government, which has made strides to improve patent and copyright laws in recent years, said it regretted the WTO decision and pledged to work toward improving healthy global trade relations.

Observers of China's commercial laws are also eagerly watching how authorities treat a bid by Coca-Cola Co to buy Chinese drinks company Huiyuan Juice Group Limited, which is being scrutinized under a new anti-monopoly law introduced last August. The US$2.4-billion deal is seen as a test for the new law, and whether authorities in Beijing are prepared to let a prized domestic brand fall into the hands of a foreign owner.

Zhao Yun, an associate professor in the faculty of law at Hong Kong University, said China has made "remarkable progress in constructing a solid commercial law framework," since admission to the WTO in 2001. New guidelines on labour arbitration have improved workers rights and established a process for dispute resolutions, and there have been positive developments on property and tax law, as well as on data protection law, for instance.

Nevertheless, Mr. Zhao acknowledged "there are still problems in the enforcement of the new [labour] law. For example there is no independent workers' union to represent the interests of the workers, so this will affect the functioning of arbitration and mediation."

By Irwin Greenstein

New labor laws in China have forced the manufacturing sector into an ever-tightening vice, giving investors further pause for any significant rebound in the world’s fastest growing economy.

In January 2008, Beijing introduced new workplace legislation called the Labor Contract Law. Its objective was to ensure job security by making cursory dismissals more difficult. The Labor Contract Law comes in on the heels of anti-discrimination labor laws instituted last year, which streamlined the process for workers to file grievances against their employers. As a result, labor disputes have surged by approximately 119% since last year as workers exercise their new rights.

While the global recession throws a monkey wrench into China’s manufacturing engine, the Labor Contract law could compound the crisis by making labor in China more expensive. In fact, there is evidence that factories are already moving to Cambodia, Vietnam and Bangladesh, which promote owner-friendly labor laws.

If in fact this migration turns into a stampede, China’s entire economy could suffer longer term damage than anticipated.

The higher salaries kicked in at a time when China’s manufacturing sector contracted for the fifth consecutive month in December, according to the CLSA China Purchasing Managers Index. In the first 10 months of 2008, 15,661 enterprises in Guangdong, the manufacturing-heavy southern province, shut down. China’s manufacturing shrank for a third month in December as export demand fell, suggesting a long-drawn-out economic slump.

Manufacturing comprises about 40% of China’s economic output. It comes as no surprise, therefore, that the World Bank forecast in November of last year China’s economic growth may slow down to 7.5% in 2009, the lowest since 1990.

While many of the closures are certainly tied to lower exports, factory owners are simply padlocking their doors rather than conforming to the more restrictive and expensive labor laws – often absconding with the employees’ back pay.

The labor laws also sanction the once-unthinkable notion of labor unions in China. All employees are now eligible to join the China Federation of Trade Unions [ACFTU], which is controlled by the Communist Party and has around 170 million members. The ACFTU is legally entitled to negotiate salaries, working hours, holidays, and benefits (although they are now allowed to strike). By the end of 2006, about 50,000 foreign companies in China entered into collective contracts and the ACFTU has said its goal is to unionize nearly all foreign companies in the coming years.

While unionization and labor laws are long overdue for workers, they also create a new investment climate in China that could reduce windfall profits across the entire economy.

China is to build up to 5,000 "bases" in 2009 to provide internship positions for the young to better prepare them for the job market as it feels pain amid the global financial crisis.

The Chinese Communist Youth League, a government body for work related to the young, will coordinate in recruiting qualified companies and individuals, the League told Xinhua Monday.

The youth leagues at municipal or provincial levels will select suitable companies to form the "bases", businesses or sets of businesses which will be able to provide positions for at least 10 interns each year with basic living allowances.

Qualified candidates for the intern positions are job-hunting fresh university or vocational school graduates, those who have failed to find a job since graduation, young laid-off workers, and young migrant workers.

The first group of nearly 2,000 such bases are already selected and made public, offering about 60,000 positions in the industries of finance, publishing, telecommunications, manufacturing and transportation.

The aim of this move is to ease the employment pressure and achieve a win-win situation between the companies and the youths, according to the Youth League.

The Ministry of Human Resources and Social Security (MOHRSS) said on January 20 that there would be 7.1 million college graduates seeking vacancies this year, including 1 million of those having failed to secure jobs last year.

The ministry also said, as of the end of 2008, there were 8.86 million urban residents registered as jobless, 560,000 more than the end of the third quarter.

New York, NY, United States, — The global financial turmoil that has led to tens of thousands of job losses in financial services has provided China with a golden opportunity to attract its overseas professionals, especially those at the high end, to return. However, the media coverage of China’s global talent hunt has left me feeling sick.
Here is a summary of what I have read:

A Ms. Yu, 43, who flew all the way from Charlotte, North Carolina, to New York City for a recruiting event, pitched hard to the recruiter sitting in front of her. “I’ve got experience in risk management,” she explained, naming the bank where she had worked and watching anxiously as the recruiter scribbled on her résumé. She breathed a sigh of relief when her résumé was placed in the review pile, implying that she might be called back for another round of interviews.

Close to 1,000 jobseekers traveled quite a distance by either flying or driving up to 10 hours to the New York event. Their wait in line for more than an hour ended up with a three-minute interview.

Some of the jobseekers who had worked in financial services for more than a decade said that their annual salary was somewhere between US$500,000 and $1 million dollars. But potential employers hinted that the highest pay available to them in China would be 1.5 million yuan (US$219,000).

Jobseekers traveled to the recruiting event on their own, waited in line for more than one hour for the opportunity of a three-minute interview, a recruiter scribbled on their résumés, and jobseekers were forced to reduce their salary expectations dramatically. This supposedly serious recruiting exercise seemed to me more like a bazaar where recruiters hoped to pick up cheap Made-in-China stuff, while jobseekers put straw on their heads to indicate they were willing to sell themselves cheap.

This happened because of the information asymmetry between jobseekers and recruiters. The former, who probably had either lost their jobs or feared for their future though still employed, were eager to find a way out. They learned that China needs talent, but did not know exactly what kind of talent is in demand, what positions are open, what credentials and experience are valued, and what compensation packages would be offered. In a word, they came to these events without knowing what to expect.

Indeed, most of those jobseekers left the events empty-handed. After attending a couple such fruitless recruiting events, even those who were seriously thinking of returning to China would have to reconsider their options.

Of course, some jobseekers might be fortunate enough to land a job. But I am not convinced that those with rich overseas experience would be willing to work for significantly lower pay. Those who do not complain about the low pay are most likely not the most talented; the truly talented would surely move to higher paying jobs if they became available. The “you-get-what-you-pay-for” principle applies to global talent as well.

In the meantime, I doubt that the recruiters know what talent they should be recruiting or have the ability to hire proper people. Most likely, those on these overseas missions are not professionals. Even if they are, given that the gap between the Chinese and international financial business is at least 20 years, they would not necessarily understand the expertise of the jobseekers and would have to wait for decisions to be made by their bosses back in China when they interview applicants. Even if they find a suitable person, the recruiters may not be able to hire him or her on the spot.

Therefore, such recruiting events are a kind of “zheteng” – a popular term of 2009, roughly translatable as “wasting time” or “flip-flopping” – for both jobseekers and recruiters.

Since the global recruiting tour is not attractive to true talent, especially experienced and senior-level personnel, and since it could produce nothing more than several kilograms of résumés at best, why are the Chinese so immersed in the practice?

The recruiters would claim that their search shows a respect for talent. In fact, the reality is just the opposite. Talent was valued when Liu Bei, a hero from the famous Chinese classic the “Three Kingdoms,” paid three visits to the cottage of Zhuge Liang, whom he wished to recruit as his adviser. It is not valued in a three-minute interview; sincerity is not shown by doing things carelessly.

Therefore, rather than embarking on an overseas talent hunt, China would be better off following the international norm.

First, Chinese institutions should place advertisements in media or on the Internet with such information as positions available, job responsibilities, working conditions, compensation and number of recruits required. If there are appropriate applicants, recruiters could chat with them over the phone first, shortlist them and invite them to China for face-to-face interviews. Finally, the employers should offer them jobs and sign contracts. In this way, both jobseekers and recruiters could avoid blind expectations and make the process more efficient.

As far as I know, few Chinese organizations would fly jobseekers to China for interviews. The return of overseas professionals, in addition to compensation, also is constrained by such equally important factors as the education of children and the arrangement of family life. Therefore, if China really wants to take advantage of the downturn and the widespread job losses to poach back much needed talent, it has to be innovative and concrete in these aspects.

About 4 million laid-off worker in China attended vocational training for reemployment in 2008, the Ministry of Human Resources and Social Security said Monday.

Another 400,000 received education to start self-employed business, which encouraged individuals to be their own bosses and make a living, the ministry's spokesman Yin Chengji said.

"We have set up special funds and are using social unemployment benefits to strengthen training for workers. We also emphasize vocational training for the laid-offs, especially the migrant workers," Yin said.

He said the training would cushion the impact of the global financial crisis and was aimed at stabilizing the employment situation in the country.

East China's Shandong province had organized training programs for 230,000 laid-offs last year, and 75 percent of those trained found new jobs, according to local government figures.

The Ministry of Finance also said in mid-January it would play a leading role in creating jobs in government-initiated projects such as civil infrastructure building and environmental protection.

Companies that rushed into China during the boom years may find it difficult amid the global downturn to extract themselves, labor law attorneys say.

“It wasn’t too long ago when the burning issue was hiring, recruiting and retention,” said Joseph Deng, a labor contract attorney with Baker & McKenzie in China. “Now it seems the No. 1 issue for many companies in China is cost cutting, termination and redundancies.”

Landmark labor laws enacted in China this year have strengthened protections for workers, including wage standards and Social Security benefits. But worker protections against employers looking to downsize their workforce may be among the most stringent, China law experts say.

Chinese labor law prohibits “at will” firing practices common in the U.S., which means employers must have a legal basis for firing any employee.

“The first thing you have to keep in mind is that employees have contracts,” Deng said. “You cannot unilaterally terminate a contract.”

Before making any layoffs, employers need to present their plans to employee-represented work councils at each company—called employee representative congresses, which are union organizations elected by employees. For employers whose workers have not organized into unions, any indication that the company intends to lay employees off could incite workers to organize.

Deng recommends that employers file a report of a strategic plan with local labor bureaus.

“They don’t approve a plan, but they play an important role in providing guidance,” he said.

Firing workers remains something of a taboo in China, as it is in much of Asia. Employers should present layoffs as part of a strategic plan rather than a cost-cutting measure, said Baker & McKenzie attorney Guenther Heckelmann, otherwise employers open themselves up to challenges from workers regarding how companies calculate their costs.

Employers are unlikely to be able to lay off groups of workers using criteria usually reserved for firing individuals, like showing a worker is incompetent or has behaved improperly. Employers must show a change in the company’s circumstances. For example, a company’s decision to idle a plant could qualify. Employers must then attempt to find new work for the employee before giving that person 30 days’ notice of his termination.

Dan Harris, a Seattle lawyer with the firm Harris & Moure, wrote in his China Law Blog that restrictions against at-will terminations may be the most stringently enforced requirements in China’s new labor law, which took effect January 1, 2008, and was preceded by a backlash among workers to worsening working conditions in China.

Harris wrote of a client who was told by a Chinese government official in Shangdong, a coastal province southeast of Beijing, that “so long as this company did not lay off any of its approximately 250 Chinese employees, the government would look the other way regarding other labor law violations.”

The popularity of the new law has tripled the number of disputes brought by workers against their employers, said Andreas Lauffs, the Hong Kong-based head of the employment law group at Baker & McKenzie.

“There’s not a single worker that doesn’t know this law inside out,” Lauffs said.

Earlier this year, a large multinational corporation represented by Baker & McKenzie negotiated severance packages with employee-established labor unions as a precondition for laying off the workers, Lauffs said.

All unions in China are organized under the nationalized All-China Federation of Trade Unions. While striking is illegal in China, workers have been known to engage in work stoppages and slowdowns. China legal experts are watching to see whether the economic slowdown will loosen the new contract laws in China.

The Chinese economy has been growing at around 12 percent a year. Officials have worried that a lower growth rate of 8 percent is the minimum needed to forestall public unrest. For now, though, the new labor laws remain intact.

“For multinationals, if they want to downsize as a result of the current economy, they’ll have to tread very, very cautiously,” Lauffs said. “China is no longer the place where you can go and set up shop with cheap labor and no labor laws.”

http://www.workforce.com/section/00/article/26/05/57.php

The National People's Congress (NPC) should introduce a new legislation that makes it a crime for business owners to flee without paying workers, a senior Guangdong official said on Tuesday.

Liu Youjun, deputy director of the provincial labor and social security department, said his proposal will be officially submitted to the NPC at next year's session.

In Dongguan, a major manufacturing base in Guangdong, 117 firms closed down in September and October.

In each case, the owners fled, leaving more than 20,000 people without wages, the Hong Kong-based Takungpao reported yesterday.

Local governments and taxpayers were left to pick up the bill, it said.

There is currently no criminal law covering this sort of behavior, Liu said.

Labor and social security departments can issue administrative punishments to business owners, such as preventing them from investing in the future, but they are not enough to stop unscrupulous operators from re-offending, he said.

The only effective solution is to introduce a law that makes it a crime for company bosses to flee their failing businesses, he said.

Meanwhile, Liu Bingquan, director of Guangdong's small and medium enterprise bureau, told NPC deputies on a visit to Guangzhou yesterday that in the first 10 months of the year, 15,661 local SMEs either closed down, suspended their operations or moved away.

In some parts of Guangzhou, local government teams have even been set up to monitor suspect firms to ensure their owners do not flee, he said.

However, not all company chiefs are on the verge of fleeing.

Harley Seyedin, president of the American Chamber of Commerce (AmCham) in South China, told China Daily: "Multinational firms don't behave like that.

"They want to expand their businesses in China, and many will be hiring more people next year."

A recent study conducted by AmCham found that most of its 1,300 member companies in South China had decided to shift the focus of their business from America and Europe to China.

"The Chinese market is getting stronger compared with the Western market," Seyedin said.

"So firms are hiring more people, rather than laying them off."

Harvard focuses more heavily on China in an effort to increase the diversity of the student body

By BENJAMIN K. GLASER
Contributing Writer

It wasn’t her school, it wasn’t a Web site, and it certainly wasn’t a recruiter that got Yichen Chen ’11 to apply to Harvard in 2006. It was a little help from her friends.

Like many students from mainland China, Chen, a native of Beijing, had to navigate the application process largely on her own. A loose network of friends, including other applicants, served as guides—even encouraging her to apply in the first place.

RED TAPE

“In China...there’s no such thing as a [guidance] counselor,” Chen explains.

In an education system that requires only one entrance exam for enrollment in national universities, Chinese students are often ill-prepared to apply to schools abroad. SAT testing is restricted; Chen traveled to Hong Kong for both the SAT I and SAT II exams.

“You feel like you are just trying to travel in the dark,” says Chen of her application process. “Sometimes there are lights around that are trying to point you in the right direction, but you can’t really trust every one of them.”

But Harvard administrators, like Dean of Admissions and Financial Aid William R. Fitzsimmons ’67 and President Drew Gilpin Faust, hope to increase Harvard’s presence in mainland China. Fitzsimmons and Faust’s recent high-profile trips to the People’s Republic of China are some of the current programs that have sought to promote connections and exchange between Harvard and mainland China.

“A leading university like Harvard has to be involved in areas where knowledge is being created and disseminated at really a revolutionary pace,” says Professor William C. Kirby, director of the Fairbank Center for Chinese Studies and chair of the Harvard China Fund.

HARVARD WANTS YOU

In the past few years, China’s higher education system has undergone an explosion in growth and development. According to Kirby, the university population has increased from five to 20 percent of the college-age population. Their aspiration, Kirby says, is to double that number. Currently, China has upwards of 26 million college and university students, in comparison to the U.S.’s fifteen million.

“If you look ahead 50 years from now,” Kirby says, “the only system of higher education that has the capacity to compete with, and perhaps exceed, America’s in many areas is China’s.”

Dean Fitzsimmons sees recruitment of the best and brightest Chinese students as an essential part of Harvard’s long-term vibrancy as an institution. In his view, an increased presence of Chinese students is necessary both to create a diverse student body and to maintain elite standards. “We are thinking generations ahead,” Fitzsimmons says. “We’re thinking much more competition.”

Kirby adds that some Chinese families are pleasantly surprised to hear that “you don’t need to be rich” to apply to Harvard. The University’s recruitment efforts are aimed at both clearing up current misconceptions and getting “people thinking about Harvard in very broad terms,” he says.

DIGGING TO CHINA

In October, preeminent Harvard mathematician Shing-Tung Yau organized the first annual Shing-Tung Yau High School Mathematics Award, a mathematical sciences competition held in Beijing. Fitzsimmons served as a judge.

While Yau established the program to “fulfill [his] dream to promote mathematics,” he acknowledges the benefits of interactions between Harvard representatives and Chinese students. “Harvard students and faculty should understand this country,” he writes in an e-mail message. “The participation of brilliant Chinese high school students [in future undergraduate life] will be very meaningful.”

While the Shing-Tung Yau High School Mathematics Award was not explicitly established to create stronger ties between Harvard and China, Harvard’s Shanghai Office does have such a mission in mind. Opened in the spring of 2008, the office seeks to promote and assist all sorts of University ventures in China. One of the office’s several goals is to facilitate Harvard admissions interviews, as well as providing “on-the-ground services” for students and faculty working and studying in the PRC, according to its Web site.

However, increased awareness has not yet translated into increased matriculation for mainland China’s students. The applicant pool from mainland China has more than dectupled in the last ten years—from 44 for the class of 2003 to 484 in the class of 2012. But the number of accepted students has remained amazingly consistent, around five each year. Fitzsimmons attributes the phenomenon to remaining obstacles, ranging from standardized tests to language skills. A lack of SAT scores and difficulties with English “will not be positive factors,” he says.

STUDENT MOVEMENT

Many student groups have taken matters into their own hands, often long before the University got in the game. Every summer since 2006, the Harvard College Summit for Young Leaders in China has brought Harvard undergrads to Shanghai to teach 300 Chinese high school students as part an intensive week of seminars, guest speakers and extracurricular activities.

“I really want a lot of Harvard students to step on the Chinese mainland,” says co-founder and Shanghai native Meijie “MJ” Tang ’09. She hopes that each trip will give Harvard students a better understanding of Chinese culture. As for the Chinese students, Tang hopes that they will find in HSYLC a love of the “true liberal arts education” and the “eagerness to learn” that she found at Harvard. Whatever HSYLC is doing, it must be working: 22 percent of their Chinese alumni are currently enrolled at prestigious universities abroad, including several at Harvard.

“There are so many programs I’ve heard about between Yale and China,” Chen says. “And Harvard should definitely be more awesome.”

—Lingbo Li contributed to the reporting of this story

Ok folks, it’s official! Now that the State Council has released its 2009 holiday schedule, we can start our planning and make full use of the precious vacation time for the coming year.

The intricacies of slapping on an extra day or two to really stretch out that 3-day weekend can sometimes be tricky. Stay local or jaunt to the near abroad? How does one overcome the teaming mass of humanity clustered at the airports and train stations? More importantly, How mad would your boss really be if you stuck ALL your vacation time right after that very meaty 8-day break in October? We’ll leave that to the tricky dicks out there.

It’s been rather common for office workers to start the work week on a Sunday after 3 continuous public holidays. Of course, not all companies abide by this schedule, and not everyone gets to take Saturdays or any time off at all.

New Year: January 1st (Thu) - 3rd (Sat). Back to work on January 4th (Sun.).

Lunar New Year: January 25th (Sun) - 31st (Sat). Back to work on February 1st (Sun).

Qing Ming Festival: April 4th (Sat) – 6th (Mon).

Labor Day: May 1st (Fri) – 3rd (Sun).

Dragon Boat Festival: May 28th (Thu) – 30th (Sat). Back to work on May 31st (Sun).

National Day and Mid-Autumn: October 1st (Tue) – 8th (Thu). Back to work on October 9th (Fri)

As you can see, there are no public holidays from June to September. This means if you have no planned vacation during this time, it will be a very long (and hot) summer.

Source: "Red Sea of Tourists" by stelzer

A group of talented graduates flew in from Beijing this month, to take part in a flagship work experience scheme. This joint UK-China Government initiative gives top Chinese graduates the opportunity to learn about UK culture and working life.

The scheme, which was announced by Prime Minister Gordon Brown during a visit to China in 2004, was set up to strengthen education and business links between China and the UK. Over 160 graduates have since taken up internships around the UK.

Thirty-one of the newest interns were welcomed at a reception organised by GTI Recruiting Solutions, at the Barbican in London. The graduates were fresh from spending two weeks at Regents College on a special induction to working life in the UK.

Employers and current interns were on hand to offer advice at the reception event. Philip Morgan from the Department for Innovation, Universities and Skills congratulated the graduates and advised them to, “work hard and make the most of their internship, making sure they visited as much of the country as possible during their stay.”

The candidates went through an intense selection process to be awarded a place on the programme, and are out to impress. For most, it is their first opportunity to experience life outside China and to gain work experience. They are very enthusiastic about their placements and the experiences they will have in the UK.

Intern Nan Zhang, explained why the programme means so much to her: “One of my friends once told me that ‘Life is a journey. Enjoy the ride’. For me, the reception event formally brought me into the field of work in the UK. This is a brand new journey for me to enjoy and an exciting adventure for me to attempt.’

A host of UK businesses are taking part, offering paid internships in a range of job functions, from marketing and HR, through to engineering, finance and project management. Employers are impressed with their interns, and their businesses are gaining much from the initiative. Paula Quinton-Jones, Graduate Resourcing & Development Manager for Europe at Standard Chartered Bank, who has taken on four interns, says “We’re delighted with the calibre of our interns – they are already making a fantastic contribution to our business”.

This is echoed by the recruitment team at Swiss Re who are set to expand in China, “We have launched an Asia Development Programme and a global graduate programme that includes China – so the UK-China Graduate Work Experience Programme is an ideal way to raise our profile among graduates in China.”

Employers offering the latest internships are Antonov, Associated Newspapers, British Sugar, Diageo, Euromoney, Halcrow, KL Communications, Lawson Dodd, Mazars, Norton Rose, Pinsent Mason, PwC, Rolls–Royce, Standard Chartered and Unilever.

The recruitment process is managed by GTI Recruiting Solutions, on behalf of the UK Government. As well as ensuring employers are matched with the graduates with the right skills and experience, GTI Recruiting Solutions takes care of all the administration required to bring the interns to the UK and provide pastoral care during their time here.

“New employers from all sectors are always welcome to the programme. If you need English-speaking talent with Chinese language skills, a strong education and a powerful will to succeed then let us know. We deal with all visa issues to make life easy for supporting employers and offer pastoral care for the interns outside the work place,” says GTI Recruiting Solutions Director Paul Clark, “Our aim here is to ensure the employers have the opportunity to offer work experience to graduate talent they are unlikely to reach. We have been hugely impressed by the hunger of these graduates and the determination to succeed.”

BEIJING, Nov. 17 (Xinhua) -- As mass layoffs and labor disputes become more frequent when global economic slowdown wipes out more companies from business, Chinese government has urged local authorities to make best efforts to properly respond.

The top priority should be given to ensuring stable employment, said China's Ministry of Human Resources and Social Security (MOHRSS) in a notice issued on Monday.

Investigation should be carried out concerning individual companies' possible layoffs, especially labor-intensive factories, it said. The labor situation of companies that go bankrupt should be closely monitored.

In October, Local government in Dongguan of Guangdong Province, where many labor-intensive companies located, took out more than 24 million yuan (3.5 million U.S. dollars) to compensate for the salaries of over 7,000 workers, who was left helpless when a company owner secretly fled.

Emergency plans should be formulated in order to better prevent and deal with incidents involving a large group of unemployed workers, and make sure to report to higher level of the government and make appropriate arrangement as soon as possible, it said.

An efficient and convenient channel should be created for people to appeal for arbitration of labor disputes, so as to resolve major or mass disputes in time, it said.

The notice also required that arrangements be made to guarantee unemployment insurance, encourage reemployment, and better serve the migrant workers.

Thousands of migrant workers in the Pearl River Delta are packing up and heading home, as jobs and decent wages in the region become increasingly hard to find.

"There just wasn't enough work; I was barely making my basic salary," Wen Caixia, who quit her job at a shoe factory in Dongguan, Guangdong Province, in favor of a return to her village in Hubei Province, told China Daily yesterday at Guangzhou East Railway Station.

Migrant workers who quit their jobs in Guangdong Province arrive in Zhengzhou, Henan Province, November 3, 2008. [China Daily]

Wen said she and her husband had been working in Dongguan for more than two years.

"Over the past few months, the company just wasn't getting enough orders. There was never any chance of overtime, so we were unable to save any money," she said.

"The living costs are very high here, so I think it's better if I go home and take care of my son," she said.

Before boarding her train, Wen said she hoped to return to the province in January for the Spring Festival.

"It might be easier to find a job then, and hopefully I'll be able to make more money," she said.

Also waiting for a train yesterday was Liang Dong, an IT engineer who said he was taking a sabbatical from his job at a printed circuit board factory in the Nanhai district of Foshan.

"The company has seen its orders plummet since the beginning of the financial crisis," he said.

"My boss said that I could take a long holiday, but it will be very hard to make a decent living."

Liang said he will have a good rest before deciding whether to return to Guangdong or look for work elsewhere.

A ticket seller surnamed Guan at Guangzhou East Station, said that over the past few weeks there had been a marked increase in the number of migrant workers heading home to Chongqing and Sichuan, Hunan and Hubei provinces.

Liang Jiamin, an official with the Guangdong labor department, said on Thursday: "Many workers have lost their jobs or gone without pay as a result of firms going bust or downsizing their operations.

"Labor and social security departments across the province, especially those based in the Pearl River Delta region, have been told to do all they can to help people get the money they are owed," he said.

"We are also trying to help people to find new jobs," Liang said.

In the third quarter of this year, the number of job vacancies in Guangdong fell by almost 17 percent year on year to 2.1 million, he said.

Public funds have been used to cover the 7 million yuan ($1 million) owed in back pay to employees of the collapsed Dongguan Weixu Shoe Company, a spokesman for the Chang'an town government said yesterday.

The press official, surnamed Chen, told China Daily that a series of measures has been introduced to deal with the aftermath of the closure of the Chang'an-based firm, which is owned by investors from Taiwan.

"When we learned on Saturday that the boss of the company had fled, we set up a task force to deal with workers' grievances and other matters arising from the incident," he said.

"The government has advanced about 7 million yuan to cover the wages of the 2,000-odd workers."

Chen said the government had been in contact with the boss of the firm and set a deadline of Tuesday for his return to discuss possible solutions.

"As he failed to return, the local government will take possession of the factory and auction off its equipment, as it is entitled to do under the law," he said.

Luo Hongliang, one of the 2,000 people left jobless by the shoemaker's demise, said yesterday that although he is grateful to the government for paying his wages, he fears for his future.

"The welfare package was good; I got more than 2,000 yuan, which covered my salary and overtime pay," he said.

"My fear now is that although some other factories are recruiting, I will probably have to take a pay cut.

"I just can't understand how such a big factory could close all of a sudden," he said.

"We've all been talking about what might have happened; some people have said the company had cash flow problems," Luo said.

According to a report in yesterday's Nanfang Metropolis Daily, the firm had been experiencing financial difficulties following a period of rapid expansion.

The final straw came when one of its partners withdrew 50 million yuan from the firm, it said.

Huang Chunming, secretary-general of the Dongguan leather and footwear association, claimed the boss of the firm had also been accused of defrauding his suppliers, the report said without elaborating.

Telecommunications company Motorola Inc yesterday said it will cut the number of its employees in China as part of a global layoff plan amid financial turbulence.

The company is currently under an internal evaluation of its Chinese operations, which is aimed at reducing costs and streamlining its products, Chen Lei, spokesman for Motorola China, told China Daily. Details of the layoff may be disclosed in the next few months, he said.

Motorola last week announced a plan to cut 3,000 workers worldwide, with nearly 2,000 from its handset division. The announcement came after the firm disclosed a disappointing third quarter result, in which net losses amounted to $397 million, compared with a profit of $60 million one year ago.

Chen said Motorola's arm in China will get more resources from its headquarters in the United States after a planned restructuring is completed. He said China's strategic position in the company will be intensified.

Foiled by its inability to extend the success of its Razr mobile phone, Motorola's share in the global handset market shrank to 8.4 percent in the third quarter of this year, down from 9.5 percent in the second quarter and 22.4 percent in 2006, according to research firm Strategy Analytics.

The company has also been struggling in the country from fierce competition by market leader Nokia, as well as the rising number of domestic venders and hundreds of pirated handset makers. According to research firm GFK China, Motorola's market share in China dropped from nearly 20 percent in 2006 to less than 10 percent this year.

Such sluggish performance was said to have led to the unexpected resignation of Ren Weiguang, head of Motorola's mobile business in China, at the end of last month.

Earlier this year, Motorola announced its decision to spin off its mobile division to turn around its handset business. But the reduced growth rate of global handset shipments in the third quarter, driven by the financial crisis, has clouded the company's revival plan.

Pang Jun, analyst from GFK China, said the long-term effects of Motorola's layoff plan are still unclear, but the move will at least help the company stem its bleeding in the short term. "The financial crisis will have a significant impact on all the mobile phone makers," he said.

Pang said the growth of the mobile phone market in China, the world's largest handset market, may drop to 15 percent this year, down from 30 percent last year. "The growth rate might be even lower in 2009," he added.

BEIJING, Nov. 1 (Xinhua) -- In the space of a year, Yang Chanjuan's career plan has changed direction. A soon-to-graduate college student in economics, Yang is feeling her fortunes being buffeted by the financial crisis.

Yang was recently told by her schoolmates already working in the financial sector that their companies would cut staff, or there would no bonus this year. Amid the turmoil and full of uncertainty, a job in banking or securities company was no longer desirable to her. As a result, she decided to apply for a government job.

Migrant workers fill in application forms at a job fair in Chongqing, southwest China on Jan. 1, 2008. International Labor Organization (ILO) estimated earlier that the financial crisis would cost 20 million jobs globally by the end of 2009. (Xinhua Photo)
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Yang's change in career plan came as the financial crisis is spreading around the world. As it is now beginning to hit the real economy, more and more people, not only those in banks, have lost their jobs.

International Labor Organization (ILO) estimated earlier that the financial crisis would cost 20 million jobs globally by the end of 2009. The ILO said the new projections could prove to be underestimates if the effects of the current economic turmoil are not quickly confronted and plans laid for the looming recession.

In the birthplace of the crisis, the United States, big companies from Goldman Sachs to Coca Cola, Motorola to Alcoa, have all announced their job cut plans. Economists believed the jobless total could increase by 200,000.

Back to China, unemployment now becomes a concern too. Although with 2-trillion U.S. dollars of foreign reserves, a budget surplus and a controlled capital market, China would suffer limited direct impact from the crisis. However, weakening demand from its major markets, North America and Europe, is now leading China's real economy in the export sectors into a tough situation.

In China's coastal areas, export enterprises are now struggling with soaring labor cost and fewer orders from foreign customers. Many toy factories in South China's Guangdong Province were shut from January to July this year.

Earlier last month, two big factories of a Hong Kong listed toy-maker were shut. As a result, 7,000 workers lost their jobs. Affected by the global financial crisis, the company was suspended from trading thus it faced severe shortage of current funds.

Statistics from the Ministry of Commerce showed that China's export suffered a growth slowdown in the first three quarters compared with the same period last year -- from 27.1 percent to 22.3 percent. The government said the gross domestic product (GDP)growth rate in the first three quarters this year slowed to 9.9 percent - a 2.3 percentage points fall compared with the same period last year.

"The greatest impact is on these labor-intensive, small and medium-sized export enterprises," said Wang Dewen, a labor economist from China Academy of Social Sciences.

These export-oriented enterprises that make China the world's workshop, are mainly small and medium-sized and vulnerable to market changes. These are China's major employers, absorbing 70 percent of the aggregate 20-million new jobs every year.

Wang said that the lower-end labor market, especially the migrant workers who are the biggest source of employees in the export enterprises, would suffer from unemployment. As the crisis is now just beginning to hit the real economy, the whole situation could be worse if there is no countermeasure.

The fear of unemployment is also hovering over other places. College students and white-collar workers are now worried about their future in the open market.

The new labor contract law does not increase any labor costs for lawful enterprises, says an article on the website of People's Daily. The following is an excerpt:

When facing the same labor contract law, enterprises have different views about its impact upon labor costs. As a textile factory owner in Fujian province said, the law tilts in favor of employees, pushing up labor costs and thus squeezing the room for development; while the boss of Anta, a sports shoes producer in Fujian, believed that it does not affect their normal operation and will contribute to merger and restructuring, boosting their development.

On Oct 7, Sun Chunlan, vice-chairwoman of All-China Federation of Trade Unions, told the press that the recent bankruptcy of small- and medium-sized enterprises has nothing to do with the implementation of the labor contract law.

The plight faced by SMEs is mainly because of the worsened international economic situation such as the fluctuation of exchange rates, weak foreign demands and domestic policies about taxation and finance. And the labor contract law in fact does not increase the labor costs of enterprises. The reasons are as follows:

First, the labor contract law does add some labor costs for enterprises that had seldom obeyed the labor law in the past. The previous labor laws and regulations in China already clarified what the employers should pay for employees including salaries, social security, welfare, housing fund and overtime compensation.

The newly enforced labor contract law only adds the requirement that employers should compensate for the termination of labor contracts with employees. So, if employers renew the contracts with employees or employees volunteer to quit their work, employers do not need to pay this compensation.

Second, some employers reduced their labor costs by adopting abnormal practices such as not paying social security for employees before the enactment of the labor contract law.

As a survey conducted in Guangdong province showed, the payment of social security for employees accounts for 2 percent of the total costs of an enterprise. The new labor contract law demands unlawful employers to make the payment of social security, leaving them with the feeling that labor costs have been raised by this new law. But we should note that social security payment is what employers should have offered and thus it does not increase labor costs for employers who have already paid this money to employees.

Therefore, in practice, it is those employers who had adopted illegal practices and seldom obeyed labor laws in the past who believe the labor contract law would increase their burdens.

The growth of an enterprise cannot be achieved at the expense of the legal rights of employees. It is not correct to regard the expenditures that should have been paid by enterprises as their increased labor costs.

The new labor contract law has just stripped unlawful enterprises of their inappropriate profits. It is a protection for lawful enterprises. Instead of weakening their competitive edge, it can bring new growth opportunities for them.

Thousands of financial workers on Wall Street are losing their jobs during this financial crisis, leading to a great dislocation of financial talent.

The so-called hot job and hot department in the financial industry will be redefined. Enthusiasm over investment banks such as Goldman Sachs and Lehman Brothers will wane, and attention will move back to the steadier, more conservative, and less risky financial institutions such as commercial banks. The internal structure of financial institutions such as banks and insurance companies will also change. Some functions such as risk management, which used to be neglected, will be repositioned and revalued. Some financial workers will have to change their professional orientation, since positions related to investment will weakened or even disappear.

Compensation and professional quality in the financial industry will also be redefined. Greed and lack of self-discipline are at the root of the financial crisis. Wall Street, with its high compensation and luxurious life styles, brought too many dreams and too much pride to too many young people, where a graduate could get a high salary fresh out of school. But now things will calm down. Too much risk lies behind irrational success and irrational wealth growth.

In the following years, the former attractiveness of investment banks, mutual funds, hedge funds, private equity funds, and leverage buyout funds is going to fade. With the crazy age coming to an end, compensation levels on Wall Street will no longer be No. 1 in the US. Wall Street will no longer be the only choice of top MBA graduates, as they will once again consider traditional and high-tech industries. High quality professional managers with will also flow to other industries.

Since the crisis, people begin to consider the ethical standards of the financial system. Wall Street and European financial markets are all considering what kind of senior managers, CEOs, and CFOs financial firms need. Further lessons on how to avoid and control risk are being learned by financial institutions. What kind of culture should be admired in financial firms? In the past, the trader, passionate, adventurous and ready to go to extremes, was the admired model. But now, at least for a while, banks are laying off the traders, and risk managers are not only keeping their jobs but being poached and headhunted as banks seek to shore up their internal control departments.

China’s industry will be more attractive to Chinese financiers. Due to downsizing in the US, Chinese employees there will also be looking for jobs. Under the circumstances, coming back to China may become their best choice. At least China’s overall economic and financial situation is still better than the US and Europe. Now many Asians are considering returning to their emerging markets, as they are more likely to find jobs there, even though the financial markets in these countries are far from their expectations. This may trigger a series of talent competitions among domestic financial institutions.

In fact, more and more western professional managers, having faith in opportunities and challenges in China and its neighboring markets, were participating in the domestic financial talent competition before the outbreak of the subprime crisis. But now the requirement for talent in the domestic financial market will include not only professional knowledge and financial management skill, but also the knowledge about China’s local culture and commercial environment, which will be as important as financial tools for some positions.

BEIJING, Oct. 23 (Xinhua) -- China on Thursday discussed drafting an amendment to the state compensation law, which would guarantee smoother channels and improved procedures for victims seeking compensation from state organs.

State organs under compensatory obligations should decide whether to compensate or not within two months after receiving appeals, according to the amendment, which was being scrutinized by the Fifth Session of the Standing Committee of the 11th National People's Congress.

Those who claimed compensation from state organs but were not satisfied with the result, could complain to the state organs' superior departments, the amendment said.

If they were still not satisfied or didn't receive prompt replies, they could appeal to the courts at the same level, according to the draft.

Problems including insufficient law enforcement against state organs under compensatory obligations, delays in making decisions and delivering compensation and a shortage of financing support had made it difficult for victims to protect their rights and interests, said Li Shishi, head of the Legislative Affairs Commission of the NPC Standing Committee.

"The amendment tackles those problems and will provide a quicker and easier way for them to seek compensation."

Apart from those changes, the draft amendment would also increase an article about both victims and state organs' obligations in providing evidence for their claims. It also, for the first time, added compensation for psychic injury.

To help victims get paid promptly, the amendment said state organs had to deliver compensation applications to the relevant financial departments within seven days of receiving a compensation invoices from the victims. The relevant financial departments should in turn pay the victims within 15 days.

The state compensation law was approved by the National People's Congress in May 1994 and was put into effect starting in 1995.

It plays an important role in solving conflict between citizens and state organs, and to sustain social stabilities, Li said.

More than 100 foreign-funded companies in Shenzhen have been ordered to sign collective contracts with their employees by Dec 5, the local trade union federation said on Monday.

Zhang Youquan, director of the legal affairs department of the Shenzhen Federation of Trade Unions (SFTU), said at a press conference that the firms, which include McDonald's, Carrefour and Ikea, should start negotiations with their employees within 10 working days (of Monday).

The talks should encompass such issues as pay, working hours, paid vacation, social security and welfare, and agreement should be reached by Nov 14, he said.

Contracts should then be signed before Dec 5, he said.

"Our proposal is protected by the law," Zhang said.

"Companies that fail to respond within 10 working days or turn down the offer will be regarded as violating the law," he said, without elaborating on what punishments those who break the law might face.

The federation will also publicly condemn any company that tries to delay the negotiations without good reason, he said, again without elaborating.

Employers should give due consideration to the rising cost of living when negotiating pay rises with their workers, he said.

"Basically the average pay rise should be based on GDP growth and the CPI (consumer price index)," he said.

Li Shaomei, vice-chairman of SFTU, said the latest push for collective contracts comes on the heels of US retailing giant Wal-Mart signing contracts with employees at its 108 unionized stores across the country.

"Wal-Mart has set an example, which is a milestone for collective agreements among foreign-funded companies," she said.

The federation will offer training, if required, to representatives of management teams and trade unions before they begin negotiations, she said.

According to figures from the SFTU, since collective negotiations were introduced to Shenzhen in 1995, more than 40,000 firms have signed contracts with more than 4 million employees.

Wal-mart became the first foreign-funded firm to do so in July, after 18 months of tough negotiations, Li said.

BEIJING, Sept. 18 (Xinhua) -- China's State Council, the country's Cabinet, issued an implementation regulation for Labor Contract Law here on Thursday in an effort to clarify confusion surrounding the law.

The new law, which was put into effect on Jan. 1, was hailed as a landmark step in protecting employee's rights. But many complained the law increased a company's operational cost as it overemphasized protection of workers.

One of the most debated terms was one that entitled employees of at least 10 years' standing to sign contracts without specific time limits. Some employers believed the "no-fixed-term contract" would bring a heavy burden to them and lower company vitality.

"By issuing the regulation, we hope to make it clear that labor contracts with no fixed termination dates did not amount to lifetime contracts," a Legislative Affairs Office of the State Council official told Xinhua.

The regulation listed 14 conditions under which an employer can terminate a labor contract. These included an employee's incompetence to live up to the job requirements, serious violations of regulations and dereliction of duty.

Another 13 circumstances were also included in the regulation, under which an employee could terminate his or her contract with an employer, including delayed pay and forced labor.

Compensation should be given if employers terminate the contract lawfully. Employers should double the amount of compensation if they terminated a contract at their own will. No further financial compensation was required, according to the regulation.

China's top legislative body, the Standing Committee of the National People's Congress, adopted the Labor Contract Law in June2007, which was followed by a string of staff-sacking scandals.

The best known was the "voluntary resignation" scheme by Huawei Technologies Co. Ltd., the country's telecom network equipment giant.

The Guangdong Province-based company asked its staff who had worked for eight consecutive years to hand in "voluntary resignations." Staff would have to compete for their posts and sign new labor contracts with the firm once they were re-employed.

Huawei later agreed to suspend the controversial scheme after talks with the All China Federation of Trade Unions.

The NPC Standing Committee said on Thursday it would start a law enforcement inspection at the end of September in 15 provinces, municipalities and autonomous regions.

The Legislative Affairs Office of the State Council issued a draft of the implementation regulation on May 8 to solicit public opinion. By May 20, the office had received 82,236 responses. On Sept. 3, the State Council approved the regulation.

China has begun tightening its work visa application process for foreigners to keep out people with a criminal record, but critics say the implementation of the provision is "ill-conceived" and will impede even Fortune 500 companies' ability to hire expatriate talent.

Under the amended rules, foreigners applying for - or renewing - work visas (Z visas) must additionally submit a certificate from a police station in their home country - and authenticated by the Chinese embassy in that country - declaring that the applicant does not have a criminal record.

Initially, the additional paperwork requirement will apply only for foreign workers in Guangdong, the booming province in southern China that's better known as the "world's factory floor". But given that Guangdong has always been a "laboratory" for China's economic and administrative reforms, the provision is certain to be implemented nationwide, reckon immigration lawyers and business consultants.

The new regulation may have been inspired by some recent instances of Chinese businesses being defrauded by foreign-national employees who (it was later revealed) had previous criminal records in their home countries, say lawyers.

In itself, the 'no criminal record' certification isn't an unreasonable requirement. "The motive (for the introduction of the new provision) is to put in place reasonable criteria for people to obtain a work permit," says Chris Devonshire-Ellis, senior partner at Dezan Shira & Associates, a professional services firm providing FDI, legal, tax, accounting and due diligence services for multinational corporations.

But there are "serious shortcomings" in the manner in which it has been implemented, he adds. "It will have a negative impact on the ability of foreign-invested enterprises in China to be properly managed, and a negative impact in the way foreign business people view China as being a reasonable place to work."

As a result of this provision, "it's going to be very frustrating for well-meaning businessmen and employers to get the right quality of senior executives and expatriate personnel into position in China," says Devonshire-Ellis.

Indians face 'discrimination'. In particular, notes Devonshire-Ellis, "certain nationalities, among them Indians, face discrimination in obtaining China visas purely on the basis of their passport."

Although this appears to be a haphazard situation, implemented differently across the country, China's administrative infrastructure appears unable to determine whether an individual is "undesirable" or a senior executive in a multinational. "This is becoming an area of concern and is damaging China's foreign direct investment environment," he adds.

There appears to have been "little or no dialogue" between Chinese immigration authorities and the international community about the implications of putting in place the 'no criminal record' regulation, says Devonshire-Ellis.

In some countries, like New Zealand, there is no such certification process in the first place. In others, such as the US, "there is no formal or well-defined procedure to obtain such a document."

In effect, China has invoked its domestic administrative system, which is based on the restrictive hukou (household registry) system, and imposed it on foreign nationals who apply for a work visa. Under the hukou system, a Chinese national's personal records are stored in their hometown, which is their place of birth. All requests to relocate in China or to engage in business are serviced by the local police station in the hometown, notes Devonshire-Ellis. "But such a procedure simply cannot be assumed to be in place in other countries, and in fact it largely isn't," he observes.

Complying with the new regulation is also fraught with logistical nightmares for those who are already working in China and need to renew their visas. "The request for a certificate from a police station in the applicant's country of origin ignores the fact many expats have worked overseas for years and may not have any contacts with their local police station in their home country," points out Devonshire-Ellis. "Second, it requires an expensive trip back home to secure such documentation."

In any case, in many countries, the administrative procedure to supply such a document does not exist. Even if it does, it's unlikely to be issued by "the local police station" in countries such as the United Kingdom, most European nations, and the US and Canada, where the registry of criminal offenders is maintained at a national, not local, level.

The latest work visa measure comes barely five months after China tightened the provision for securing business (F) visas and tourism (L) visas. In the run-up to the Olympics, and following the riots in Tibet in March, China introduced stringent provisions that still remain in place. Immigration lawyers in Shenzhen expect the F visa and L visa provisions to be relaxed a bit after the Paralympics in Beijing, but with greater monitoring to prevent their abuse.

Foreign companies operating in China have been given a 30 September deadline to allow unions to be fomed in their offices and factories failing which, the companies could be publicly vilified or blacklisted by the union and also attract penalties from the government.

China is asking all foreign companies to permit state approved labour unions at a time when raw material costs have risen dramatically and labour costs escalated by 30 to 40 per cent, forcing foreign corporations to think twice about setting up shop in China.

Many large corporations had set up manufacturing units in China mainly because of cheap labour and also to avoid labour problems that disrupt operations in their own countries. The ongoing Boeing machinists and the strike threat at Arcelor Mittal steel plants in the US are striking examples.

This move to permit unionisation stems from China's recent economic boom and the government is keen to rectify some of the maladies like vast income disparities and labour exploitation that has been highlighted by leading western labour activists.

Many large American corporations such as Wal-Mart, McDonald's, Yum Brands, Kentucky Fried Chicken and Pizza Hut who own and run their establishments in China, have yielded to employees setting up unions, while those like Microsft and PricewaterhouseCoopers are resisting on the grounds that they do not operate manufacturing units.

In 2006 nearly Wal-Mart employees at 108 stores have opted to have a trade union although Wal-Mart's dislike for trade unions is well known in the US and other countries where it operates.

Companies that have set up manufacturing units in China will be the hardest hit due to soaring raw material and labour costs. Despite adhering to Chinese labour laws, they fear allowing unions would force them to have to pay substantial overtime wages, as many factories maintain a six-day work week.

Labour activists worldwide have targeted Chinese manufacturing enterprises, which employ child labour, with reports in the western media of children being forced to put in working hours of nearly 100 hours a week without any overtime and often in violation of safety regulations.

Some of the contractors for big renowned brands such as Wal-Mart, Adidas and Disney were fired for hiring and exploiting child labour.

Analysts say that allowing unions in Chinese companies would give absolute power to the the only union allowed by the government, the All China Federation of Trade Unions, in terms of bargaining and force foreign companies to consult with the unions on every issue, a thing foreign companies never had to do in the past.

The question of agitating for their legal rights and the ability to bargain collectively is still a question mark as unions are a relatively new concept in China.

According to the All China Federation of Trade Unions, by the end of September about 80 per cent of the top 500 global corporations operating in China would have unions.

International hiring expectations have fallen across Asia from the previous quarter, but in China they are rising, the latest report from human resources firm Hudson said.

About 55 percent of respondents planned to increase their headcount in the third quarter, compared with 52 percent in the previous quarter, the report said.

But on a yearly basis the rate has dropped. In China, 60 percent of employers wanted to boost their headcount in the third quarter last year.

Employers in China still face the highest salary inflation in Asia, with only 8 percent of respondents saying they can negotiate lower wages for new managerial hires in the current economic climate.

The Asian edition of Hudson's quarterly report was launched in 1998. Its premise is that employer expectations of staffing levels reflect the general industry outlook.

Over 2,600 key employment decision makers from multinationals of all sizes in all major industry sectors were surveyed for the report, with 708 of the executives based in China.

Buoyant market

"China is the only market surveyed in Asia where employment expectations are rising this quarter, reflecting that the market is still buoyant, so employers have little scope to negotiate lower new-hire salaries, and few are experiencing any reduction in staff turnover rates," Angie Eagan, general manager of Hudson Shanghai, said.

The banking and financial services sector had the highest expectations: headcount growth forecast at 64 percent, compared with 57 percent in the March-June period.

Hiring is picking up after a period of consolidation, when banks were evaluating the impact of the subprime crisis and absorbing new regulatory measures. Much of that increased recruitment is in consumer and private banking.

But the biggest increase in hiring expectations was in the consumer sector, which went from a 45 percent forecast for headcount growth in the last quarter to 60 percent this quarter.

The third quarter is traditionally the peak season for the consumer sector, and August's Olympic Games boosted the retail and hospitality sectors. Expansion in tourism, retail and hospitality is also driving growth.

Wage pressure

Salary inflation is still a major issue for employers in China. Only 8 percent of survey respondents across all sectors said they had negotiated lower salaries for new managerial hires. Companies in the manufacturing sector were the most confident about paying less to new hires.

That's partly due to a trend for expatriate and Chinese returnee candidates to be offered local remuneration packages, the report said.

The media, public relations and advertising sectors had the lowest proportion of respondents who said they could negotiate on wages. There is a skills and experience shortage in this area and candidates are more likely to receive multiple job offers.

Of the employers able to negotiate lower starting salaries for new managerial hires, 35 percent said they had cut wages by 1 to 5 percent, while 52 percent had offered 6 to 10 percent less.

That suggests scope for lower starting salaries is limited in the current climate and that skilled staff are still in high demand in most sectors, according to the report.

"This is still a talent-short market, and the ongoing competition for strong candidates means that employers are not able to effectively combat the increases in asking salaries for new hires," Eagan said.

Staff turnover

Employers in China still face high turnover rates, with 71 percent of respondents saying there has been no reduction in the past year - the highest figure for all Asian markets surveyed, including Hong Kong.

Eagan said the market is still buoyant and there are many opportunities for skilled candidates. Consequently, staff turnover and retention are still major issues for employers in China.

The banking and financial services sector reported the highest retention rates, with 33 percent saying their staff turnover rates had decreased from a year ago. Many employers in the sector, particularly international banks, have developed human resources strategies to retain employees.

The information technology industry, in contrast, had the highest turnover rate with only 15 percent reporting lower staff turnover in the past year. Many in the industry tend to swap jobs regularly, to work with new products or systems.

Performance-linked bonuses and training and development programs are the most effective ways for companies to retain talented staff, the survey respondents said.

Across all sectors, 30 percent of the respondents said they offer performance bonuses, while 26 percent use training programs to encourage staff to stay.

Substantial pay increases are the third most popular way to keep staff, offered by 24 percent of the survey respondents.

The domestic job market will face growing pressures over the next few months as global economic problems cut employment in a number of sectors, a top labor official said yesterday.

"Employment remains a major difficulty in terms of overall social development, and it faces huge pressures," Hu Xiaoyi, Vice-Minister of Human Resources and Social Security Hu Xiaoyi told a news conference at the Beijing International Media Center.

About 20 million people join the workforce every year in China, which continues to have a labor surplus, he said.

Growing global economic uncertainties in the first half of this year and the pressure brought by a rising yuan on foreign trade have led to job cuts in a number of sectors, Hu said.

Adding to the seriousness of the situation is the large number of laid-off workers from State-owned enterprises (SOEs) as 2008 marks the last year for the central government to shut down bankrupt SOEs, Wang Yadong, a deputy division chief at the ministry said earlier.

Zhou Tianyong, professor of the Party School of the CPC Central Committee, said that the possible economic slowdown during the next six months will put pressures on China's employment market.

"China's employment has been generally driven by investment. With the scale of investment shrinking, it is time to rethink this employment growth model," Zhou told Xiaokang magazine in July.

To tackle these problems, Hu said the government will continue to focus on creating employment for families in which no member has a job, people below the poverty line and the more than 5 million people graduating from universities every year.

The government is also encouraging people to set up their own businesses, Hu said.

China's registered urban and township unemployment rate stood at 4 percent in the first half, generally the same as in the same period last year, he said.

A total of 8.35 million people were registered unemployed across the country's urban areas and townships in the first half of the year, the ministry said.

However, the figure did not take into account the huge number of people made jobless by the May 12 earthquake, Hu said.

Some self-employed people in the quake zone are still running businesses, and those made temporarily jobless will soon resume their employment as soon as reconstruction begins, he said.

According to estimates, more than 700,000 people in Sichuan are believed to have lost their jobs as a result of the quake.

Vice-Minister of Civil Affairs Jiang Li told the same conference of Friday that people who lost their arms or legs in the quake will get life long care and treatment from the government and charitable bodies.

CHINA'S monetary policy will not shift substantially in response to the global downturn. But employers in China should increase wages by 10 per cent in order to attract workers as the labour surplus disappears.

These are among the rare insights opened, through China's leading business publication, Caijing magazine, into the economic advice the country's leaders are being given as they face multiple challenges.

Cai Fang, director of the Institute of Population and Labour Economics at the prestigious Chinese Academy of Social Sciences, has spoken to the magazine about his message to Premier Wen Jiabao and the State Council, China's cabinet, during a closed-door meeting with eight leading economists.

He said: "We talked about whether economic growth will slow, how to contain inflation and stimulate growth, and whether China should maintain its tight monetary policy."

China's economists, he said, "are split on the two major macro tasks: fighting inflation and stimulating growth. However, we generally agreed that monetary policy should remain as it is. We should neither loosen it nor tighten it further."

Cai said officials at the State Council were especially concerned about the extent to which the slowdown of gross domestic product growth -- from 11.9 per cent in 2007 to 10.4 per cent in the first half of 2008 -- will hurt employment. "Should we retain the growth momentum to ensure high employment rates?" This, he said, was his main focus. "The growth rate is flattening out, while unemployment is climbing."

In the last quarter, ending June 30, registered urban unemployment reached 4.1 per cent. Clearly it was rising, he said. Before this year, it was declining.

"A few years ago, China's registered unemployment rate didn't reflect the real situation because it excluded laid-off workers. But the number of laid-off workers has largely been reduced in recent years due to the Government's re-employment efforts. Now the registered rate is close to what it is in reality."

But in China, he said, "economic growth and employment are not closely related. One reason is that Chinese policy favours large size companies. The preference became even more obvious when the Government adjusted its macro-economic policies recently."

Companies receiving government backing, he said, "are usually enterprises with high profits, low emissions, low rates of pollution and less reliance on resources. In reality, they are big companies, especially state-controlled ones, equipped with better technologies."

His institute surveyed 17 industries and found that capital-intensive companies, most of which are large firms, contribute substantially to GDP growth but are not so impressive in terms of creating new jobs.

Last year, the control of credit was tightened in both quantity and quality. Better risk controls and higher earnings were required for lending, and that situation diverted loans toward larger companies and away from small ones because, he said, "lending to them became even riskier".

Most unemployment, he said, is structural rather than cyclical. Coupled with the low employment rate of college graduates, the rate even shows signs of rising.

Cai said private companies, most of them small and medium-sized, had played an important part in absorbing labour displaced by massive lay-offs from state-owned factories.

But "the current economic slowdown, however, has hit them hard. And statistics tend to miss unemployment in these sectors", with migrant workers not being registered at all.

Tight monetary policy was not good news for such businesses, he said. "Historically, it's hard for these companies to borrow from banks, and they turn to the market for financing." With the central bank issuing the commercial banks with firm instructions to tighten lending, the SMEs tend to borrow privately from "grey" sources, which "leads to skyrocketing interest rates".

Tax revenues rose rapidly in the first half of 2008, he said, so, in compensation for the adjustments required from vulnerable businesses, "it's widely agreed among scholars that we can cut tax rates a bit.

"There are needs for more government spending -- natural disasters hit China one after another, and we just hosted the Olympics. And it might want to set aside some money for a rainy day."

However, "nobody is speaking on behalf of SOEs and advocating low taxes".

China has no nationwide social security system, he says. Some provinces don't even have a province-wide social security net. "That leads to many migrant workers withdrawing from the social security system. Why? For instance, in the pension system, workers pay 8 per cent of their salary and companies match it."

In seasonal, labour-intensive industries, workers finish their terms and leave the job for good. But their social security benefits can't go with them. So they have to withdraw from the system, taking back their own contributions, while the company's contribution stays within the system.

"So there is no upside for workers to join the pension system, and for companies it creates a financial burden," he said.

"Officials from inland provinces complain that coastal provinces have seen a fast increase of social security funds because they not only siphoned labourers from inland but social security funds as well."

Cai said that migrant workers' insurance provisions should be portable and nationwide. When workers retired, they should be able to receive both their own contributions and those from their employers. "China's development has reached a stage where labour shortages are occurring, and the labor supply-demand equation is changing. That requires a rise in salary and other benefits."

He backed the new Labour Law that came into effect on January 1, and which has come under attack from some employers, saying wages should rise by some 10 per cent.

"I think we should stick with the new law," he said. "There are problems with enforcing it, which were not created by the law itself but by a lack of support measures.

"Companies feel overburdened, partly because of the inadequate social security system. This is not the fault of the Labour Law. If a company can't bear a modest rise, it is not competitive except as a sweatshop. We should let such companies die, if they have to."

In developing countries, he said, sometimes when laws are made to protect workers the result is higher unemployment. "The unlimited supply of labour in developing countries is to blame.

"India is one good example. Research shows that economic development levels in different parts of India are directly related to their labour policies, and those which have tight labour regulations often lag in economic development."

The reason that Cai backs the Labour Law is that labour in China is moving from a surplus to a relative balance. "There must be some kind of incentive to spur labour supply and attract workers," he said.

BEIJING, Sept 9 (Reuters) - China's employment outlook is dimming for the rest of 2008, but post-quake reconstruction will increase jobs in the west of the country, Manpower Inc (MAN.N: Quote, Profile, Research, Stock Buzz) said in a survey released on Tuesday.

A poll of 4,014 employers in nine major cities showed China's net employment outlook -- the difference between firms adding jobs and those cutting them -- was a positive 12 percent for the fourth quarter, the employment services provider said.

But the reading, which is seasonally adjusted, was down 3 percentage points from the third quarter and 1 percentage point from a year earlier.

Lucille Wu, managing director of Manpower Greater China, said job seekers in the services sector were most likely to feel the pinch as companies cut temporary workers after the Olympic Games, although the overall impact would be limited.

The survey's reading for the services sector was unchanged from the third quarter but was down 2 percentage points from a year earlier.

Wu said a slew of government measures, including more bank loans and tax breaks, to help the local economy recover from May's devastating earthquake in Sichuan would encourage hiring in western cities such as Chengdu and Xi'an.

Optimism among employers in Chengdu was at a record high, the survey showed.

Elsewhere, hiring prospects weakened across the Asia-Pacific, according to Manpower, while the U.S. jobs outlook fell to its lowest level since 2003 as growth slowed due to the still unfolding financial crisis. Please click on [ID:nN08468275] for a related story. (Reporting by Langi Chiang; Editing by Alan Wheatley and Ken Wills)

BEIJING, Sept. 12 (Xinhua) -- More than 2,700 people have applied for 16 executive positions of the centrally-administered state-owned enterprises (SOEs) open for public competition this year, the State-owned Assets Supervision and Administration Commission (SASAC) said.

The 2,745 applicants more than doubled that of those applying for last year's 22 posts.

Of this year's available posts, six received 200 to 300 applicants for each.

SASAC said the positions included three general managers, 10 deputy general managers and three chief accountants from different industries. They covered electricity, metallurgy, electronics, chemical engineering and trade firms.

China FAW Group Corporation, China Baosteel Group and China Southern Power Grid, all ranked among the world's top 500 companies, were also recruiting.

SASAC also said 383 applicants, 12 from overseas and four from Hong Kong, Macau and Taiwan, met the qualifications. They have been notified to sit for a written exam to be held soon.

Most qualified applicants have post-graduate degrees and are aged under 45, while 140 currently are heads of enterprises. In addition, 69, or 18 percent, have overseas working or study experience.

In 2003, SASAC started to recruit from both home and abroad. The agency hoped such managers could help improve the competitiveness of SOEs in the global market.

by Frank Mulligan

With a population of 1.3 billion, the continual assertion that there is a skills shortage for professionals and workers in China is difficult to comprehend – and even more so with the added contradiction of reports of a shortage of jobs for Chinese graduates.

Yet it is a serious problem. The Shenzhen Labor Bureau cites a shortage of 750,000 workers in Q3 for 2007 - that’s the best part of a million people in a city that has a total population just over 6 million.

Frank Mulligan, who will be talking at the forthcoming Online Recruitment Conference in China, in Hong Kong, takes a look at the good and bad news behind the hype.

Education
The Good - Educational opportunities in China are at an all time high. Teenagers about to leave school have never had it so good, and somewhere in the region of 30% of high-school leavers in the cities will have the option for further study.

The Bad - At the same time, this year will see 20 million new job seekers in China, among both high school and university graduates. They enter the market at a time when the overall world’s economy is drifting downward and they have gone through a rote learning education system that does not equip them for the workplace. Employers regard professionals with 1-2 years as their starting point, not graduates. Graduate unemployment is as common as multiple job offers for experienced hires.

Economic Growth
The Good - The Chinese economy has grown by 10% a year for 20 years, and tipped above this figure last year. Continued high growth is certain but just not at previous rates.
The Bad - The Chinese government has painstakingly put together a huge raft of measure to slow down its runaway economy. This includes everything from the abolition of export tax rebates, to additional taxes, to tighter monetary control. It hasn’t worked so far but the arrival of the sub-prime debacle in the US has created slowdowns around the world. This event, plus the measures in China, might all kick in together.

Unemployment
The Good - Paradoxically, continued strong growth is the more likely scenario in China. This would be in excess of ‘only’ 8%.

The Bad - It might not be enough. A slightly slower growth might look like a small price to pay for economic stability. But it might be not be enough to sop up the additional new workers, and those laid-off in the event of an export downturn (which appears to be happening). The stock exchange ‘correction’ we have seen lately, plus the slowdown of housing prices around the country will only exacerbate the problem.

FDI & Services
The Good - If we are lucky the expansion of services, especially banking, will contribute to solving the problem of declining industrial production. This is often cited as the way out. The idea is that the economy will continue growing, and FDI will continue coming in, because industrial investment and growth will simply be replaced by investment and growth in services.

The Bad - We cannot expect services to come in to save the day at exactly the point that manufacturing slows down. Services will develop, to be sure, but at their own rate. It’s also hard to see factory workers changing their industrial style boiler suits for suits ‘n ties. Not in the short term anyway.

Factory Losses
The Good - The loss of factories around China, but especially in the south, is focused on low-level production that the Chinese government says it wants to move away from anyway.

The Bad - The factory workers who are currently losing their jobs are in very low-technology sectors. Some of these jobs are on the margins of indentured servitude. It will not be so easy for these people to transfer across to semi-conductor plants.

The Labor Law
The Good - The new labor law.

The Bad - If we are not lucky the effect of China’s labor law will be to dampen enthusiasm for China, and cause Foreign Direct Investment to shift to cheaper countries for the long term. Currently we are witnessing the wholesale exit of low-tech factories from China, and these are moving to lower-cost countries like Vietnam. Let’s hope it’s a blip, and not a trend.

Whether good or bad, the new environment in China is certainly much more complicated and unstable than before. It needs workforce planning, not hiring, retaining-for-a-bit, losing. Maybe is it time for HR to take a lead from the government’s quality drive, and move up a notch.

China’s Recruitment Challenges will be debated in more detail at the onrec.com Online Recruitment in China Conference, in Hong Kong on 23rd September 2008. Learn more about the current trends and challenges, and learn about the best practice solutions being successfully implemented around the globe. For more information and to reserve your seat, please visit www.onrec.com/hk or email kelly@onrec.com. Availability is restricted so please book early to avoid disappointment.

BEIJING, July 28 (Xinhua) -- Urban workers' per capita salary averaged 12,964 yuan (1,878 U.S. dollars) in the first half of this year, up 18 percent year-on-year, China's National Bureau of Statistics said on Monday.

The per-capita salary for employees at urban state-owned enterprises was 13,800 yuan, up 17 percent, and that for workers at private entities, 12,610 yuan, up 19.2 percent.

Urban workers' per-capita salary was 24,932 yuan for all of last year.

The per-capita disposable income of urbanites rose 14.4 percent, or 6.3 percent in real terms, to 8,065 yuan in the first half.

The consumer price index, a major gauge of inflation, rose 7.9 percent in the first half.

Farmers' per-capita cash income stood at 2,528 yuan in first half, up 19.8 percent, or 10.3 percent adjusted for inflation.

IBM (IBM) China has made a response to the labor dispute in China, saying that it continued to provide economic and medical assistance to the employee after his submission of an application for resignation, but it has not made any comment on the judgment made by Shanghai Pudong New Zone Labor Arbitration Commission which asked it to fulfill the labor contract with the Chinese employee and pay him CNY57332 in compensation.

IBM Shanghai's public relations department has sent a statement to Sina.com in which they say that they provided economic and medical assistance to the employee with depression after he filed a resignation application, and they won't make any comment in detail as the case is still being decided.

Previously, Chinese media quoted the employee who said he would insist IBM carry out the arbitration result and would ask to go back to work in the company though he had not been contacted by the company following SPNZLAC's judgment.

According to Sina.com, the unnamed employee signed a five-year labor contract with IBM in 2006 after his graduation from a famous university in Hubei Province and began to work as an R&D engineer for IBM Shanghai. However, because of the heavy work pressure at IBM, the employee soon was diagnosed with depression. After that, he submitted a resignation application to IBM to give him time to cure his illness, but IBM proposed he change the resignation into an extended sick leave. When the employee's health returned and he asked to go back to IBM with the doctor's suggestion of working while receiving therapy, his request was turned down by IBM. After a number of fruitless negotiations with IBM's top management on resuming his duties, his health became worse. He even once attempted suicide after a meeting with the company's top management.

On February 27, 2008, IBM Shanghai issued a notice to the employee, saying that the company would terminate the labor contract with him because he had broken the company's disciplines and seriously affected the company's normal work order. Believing that IBM China was discriminating against him for his depression, the employee has now sued, asking for IBM to continue fulfilling the labor contract with him, compensate him for past salary and pay him emotional compensation.

By Liu Jie (China Daily)

Angie Eagan admits she is good at solving problems, and as the general manager with the headhunting firm Hudson Shanghai she is helping multinational companies in China find the talent they need - a task that she also admits isn't always easy.

Hudson is a worldwide provider of permanent recruitment, contract professionals and talent management solutions worldwide.

With more multinational companies establishing and expanding their presence and more Chinese companies emerging, finding the right people to fill the right positions, especially at the leadership positions, is a challenge for any firm, according to Eagan, who has 20 years of experience in the field and has worked for 12 years in China.

"Multinational companies' (MNCs) expectations for the capability of their local staffers are much higher," says Eagan. "And many of them who have to localize their human resources management find getting the right people is not easy. Getting capable leaders is even more difficult."

Her conclusions come from study and research by Hudson, meanwhile, a series of surveys from other firms confirm the findings. A survey by the US-based management consulting firm Hay's found that finding the right people for leadership positions is the No 1 challenge for MNCs headquartered in Shanghai. It also conducted a survey on the Fortune Top 500 Companies, and 35 percent of the respondents said they believed recruiting and retaining capable senior executives with a global view and local knowledge is the toughest challenge.

Eagan cites an example. A senior executive whose company was a newcomer to China told her that his company's job description is one level, but he has to hire people one level down and pay them two levels up. That is because he cannot find people meeting his demands but must also have somebody to support the group's establishment and expansion here.

"This is the talent shortage in China. It's truly a candidates' market right now," says Eagan.

Faced with the challenge, companies have shifted from being willing to continually hire to caring more about how retaining and training their employees.

Eagan specifically mentions the talent shortage in the middle and senior levels.

She says there is a lot of stress on executives for several reasons. One is that many managers are filling positions for which they are not trained, experienced or capable.

Second, companies are often growing quickly in China and even if some leaders are capable, their duties expand with the growth. If the company has trouble finding filling new positions, the managers end up doing two, or even three, jobs.

According to Eagan, people that MNCs need most are those who can meet with their levels and who will be leading their local companies within five to 10 years.

When a MNC wants to build its business in China, what it is really looking for are potential leaders, who learn the company's business, and culture and are able to teach other people.

"Those are the most difficult people to find right now, what we called like the second-line managers," Eagan says.

Basic characteristics

There are a few dynamics really important for business leadership in China. One is an ability to build strong business partnerships, which includes building partnerships with the government.

"This is something you might not do in another area of the world, but here you should think about your relations with the government and what you can do to aid the society," says Eagan.

Companies also have to work with suppliers and customers - as well as sometimes with competitors - so partnership building is very critical.

Furthermore, a leader should have clear vision and sense of purpose, because there are so many unexpected, frequent changes in China that a business leader needs to be able to clearly articulate his or her direction.

A leader also needs to manage change and be able to put the steps in place to help people and encourage them to all move in the same direction.

"If you don't change your company under these market dynamics, it means your company probably dies," she says.

A corporate leader in China should also be really resilient, she says.

"If you hit a wall, you don't fall back and say 'Oh, no', you just stand there and ask yourself, 'Yes, how do I go around it, how do I go over it?' says Eagan, adding that a leader has to be somebody who can absorb negative experiences and keep going.

Solution

As one of the world's leading executive recruitment and related consulting services firms, NASDAQ-listed Hudson has over 148 offices in more than 20 countries and regions and 3,600 staff worldwide with 1,500-plus in Asia Pacific. Its revenue exceeded $1.4 billion in 2006.

Entering China in 2000, the firm has three offices under two brands in China: two Hudson offices in Shanghai and one in Hong Kong called Tony Keith which is in IT recruitment and acquired by Hudson last year.

Eagan says her pride in Hudson China comes from "exceptional people". There are about 180 staffers in its China offices aged mostly 33 to 35. More than 90 percent are local consulting talents.

"We value our people, who are really good and professional," say Eagan, adding that Hudson cares great deal about training and growing its people.

The firm has a large database, a professional research team and senior consulting service talents.

Consultants work with researchers to make sure they get the full picture of the industries that are looking for employees. Then they interview candidates, offering reports and suggestions for the clients. They negotiate with the clients and candidates on salary packages, positions and contracts. Ultimately they help the two sides seal contracts and related agreements.

"We typically run all process within four months, it's very fast (compared with the average industrial level)," says Eagan.

To help retain and grow talent, Hudson has a talent management division to identify and train leaders and future leaders to take senior positions within three to four years.

Firms anxiously seek those with global expertise
Susan Fenton, Reuters
Published: Monday, May 26, 2008
American-born Thomas Kwan's career has taken off since he moved to China to work as the country manager for a U.S. health products company.

"If I'd stayed in the U.S. I wouldn't have had the same opportunity for advancement," said trilingual Kwan, 46, who was brought up in a Cantonese-speaking household in Virginia and also speaks fluent Mandarin and, of course, English.

"The U.S. is still a Caucasian-dominated society," added Kwan, who now lives in Shanghai.

Job fairs in China are one way for companies there to try to fill a void for managers with both Chinese language skills and international exposure.

China's rapidly expanding economy has created a seemingly insatiable appetite for Chinese-speaking managers.

Yet even though three million university graduates enter China's workforce every year, multinational companies are finding it hard to find local talent to meet that demand.

Companies that are successful in luring top-notch recruits are at an automatic advantage in the race for a piece of China's $1.3-trillion US consumer market.

But competition for good quality hires, especially experienced managers, is fierce.

Companies in China will need 70,000 middle and senior managers over the next five years, according to executive search firm MRI Group, but they are unlikely to find them.

"We'll be lucky if we can identify 50 per cent of that number," said Erica Briody, director of MRI China.

Since last year, Pricewaterhouse Coopers has posted Chinese recruiters in the United States, Britain and Australia to scout for graduates at university campuses as they seek to keep pace with business growth in China by recruiting 3,000 people a year.

They are targeting Chinese students studying abroad, as well as experienced foreign professionals with a Chinese heritage, such as Kwan.

"The economic boom in China means the talent needs are demanding. We are building a talent pipeline for the future," said Angela Jiang, a PricewaterhouseCoopers recruitment manager based in New York and responsible for finding U.S.-based talent for the firm's China operations.

Recruiting qualified Chinese-speaking managers is crucial for firms, especially multinationals, as they seek to capitalize on business opportunities in the world's fastest growing major economy.

"Multinational companies are looking to China to grow their organizations," said Briody.

"If they can't get the talent, their expansion plans will be limited. Ultimately they can't be competitive."

A report by the McKinsey Global Institute in 2005 said fewer than 10 per cent of China graduates who applied for jobs at multinationals had the right skills and qualifications to work there. Poor English was the main shortcoming.

The Asian Development Bank in its 2008 Asian Development Outlook says the skills shortage is aggravated by China's failure to produce the right kind of graduates rather than too few.

Chinese graduates may be well versed in theory but often lack practical problem-solving skills, analysts said.

"While the root cause of China's skills crisis lies in the leap in demand for skills, the education system has failed to keep pace," the ADB said in the report.

Kwan, who has been in China for four years, says his understanding of Chinese culture is as invaluable as his linguistic abilities when it comes to managing his China team.

"Here, I am bicultural. I understand that Western culture and Chinese culture are different and that Chinese don't normally speak out," he said.

"A lot of expat managers fail in China because they don't understand that Chinese don't tell you what they think."

As Chinese workers gain more power and employment choices, the country's economy has had to adjust. And these changes may soon impact prices on goods in America. Host Steve Inskeep talks with NPR's Frank Langfitt and Alexandra Harney, author of The China Price, about what the future may hold for the world economy.

In recent years Chinese workers gained leverage due to an unanticipated labor shortage, Langfitt says.

"This gave more workers a lot more power vis-a-vis management," he says, adding that while people were desperate to have jobs in the '90s, today they may walk out of a factory if they don't like their job or the working conditions.

This shift in power has led to increased costs for Chinese manufacturers.

"China used to be so cheap they were unbeatable," Harney says. "The China price was the cheapest price you could get for anything around the world, but now that China is becoming more expensive, thousands of factories are starting to close down in Southern China."

As a result, Harney says, American companies will start paying more for goods they buy from China.

"I think that we are going to start seeing more and more of this show up on American price tags this year and next year," she says. "Some retailers and importers are telling me that they are already starting to have to raise the prices in the U.S."

Hangzhou, April 12 (Xinhua) -- China is launching a systematic effort to support ordinary workers to bargain for salaries with their employers.

The All China Federation of Trade Unions (ACFTU), the national labor organization with a membership of 169.94 million people in 2007, released its plan to promote the collective bargaining in more industries and regions.

The mechanism would allow trade unions or labor representatives to take the lead in appealing for salary rises and directly negotiate with employers until the two sides reached a plan.

"We would promote the negotiations of reasonable salaries, bonus, allowances and subsidies," said Sun Chunlan, ACFTU vice-chairperson, at a meeting here on Thursday.

The idea to solve salary disputes through organized negotiation was introduced by former the Ministry of Labor and Social Security (now the Ministry of Human Resources and Social Security), which issued a tentative measure in 2000.

"The employer and the workers are equal in raising suggestions and have the same veto power," it said.

The promotion of such a practice, however, has been hindered by the lack of legislative support and the diversified situation of both public and non-public enterprises. In addition, the growing number of job seekers gave employers far more leverage than the workers in bargaining labor prices.

"And trade unions in many private companies are established by the business owners and are affiliated to the company. Therefore, they are unable to effectively bargain salary rises for the workers," said Xu Xiaojun, a professor from China Institute of Industrial Relations who specialized in trade union study.

"Unreasonable salaries have become a major problem causing social conflict in the Chinese labor market."

ACFTU Vice-chairperson Sun Chunlan said it would explore and try to solve existing problems in promoting salary negotiation.

Authorities in Shanghai issued a detailed plan in March to promote such practices. It aimed to establish the bargaining mechanism in 75 percent of state-owned enterprises and 60 percent of non-public enterprises with trade unions this year. The plan would expand the number of laborers covered in the mechanism by 10 percent.

In March, a salary negotiation in Hua Yue, an adhesive tape producer in Hebei Province with more than 700 employees, lifted workers' annual minimum salary by 1,860 yuan (265 U.S. dollars). Experienced workers enjoyed a higher increase.

According to data from the National Bureau of Statistics, per-capita disposable income was 13,786 yuan in urban areas last year, up 17.2 percent, or 12.2 percent in real terms. Per-capita income was 4,140 yuan in rural areas, up 15.4 percent, or 9.5 percent in real terms.

The recent Asian sensation and economic explosion has sent citizens of China and South Korea to working tirelessly in mastering the English language. This is the new Asian fascination. English is not just a new way of communicating or status symbol; it is a guaranteed competitive advantage for the young and savvy Asian in a recently overly exposed society with “super power” intentions.

Not surprisingly, the English sector of the language industry is one of the most profitable in China and South Korea. Asian schools are bustling and working relentlessly to aggressively recruit native English speakers to teach English in their countries.

“Westerners” are enthralled by these job opportunities because it gives them the opportunity to explore Asia, a part of the world that until now has remained a mystery for many. These positions are quite seductive because it allows English speakers to save a large percentage of their salaries, and indulge in a new cultural adventure while learning a new language and meeting some great people along the way. These jobs come with a furnished apartment, a round trip ticket, severance pay, free language classes and medical insurance. Some employers will even provide three meals per day, a cell phone and a sign on bonus. Teachers are not required to have previous teaching experience; they are however required to have a Bachelors degree which can be in any concentration.

Xandria Hendricks, co-founder of Allestra Recruiting, Inc., a Florida based recruiting firm specializes in recruiting Teachers for the Asian market, has confirmed that this is a vibrant market. She stated that “the recent attention on Asia has resulted in an equally overwhelming demand from individuals who want to go to Asia and Asian institutions that are eagerly recruiting to fill positions both in China and South Korea. Allestra Recruiting has partnered with several Asian companies to place English speakers into jobs in both China and South Korea. Allestra’s partners include Beijing’s 2008 Olympic Games official language training services supplier.

To contact Allestra Recruiting, Inc., e-mail Admin@Allestrarecruiting.com. For more information, visit the Web site at www.Allestrarecruiting.com.

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Professional Free Press Release News Wire

BEIJING, March 11 (Reuters) - China's employment outlook has slumped in the wake of a new labour law, hitting its lowest since Manpower Inc (MAN.N: Quote, Profile, Research) began a quarterly survey of job market conditions three years ago, the firm said on Tuesday.

A poll of 4,055 employers in seven major cities showed that China's net employment outlook for the second quarter -- the difference between those firms adding jobs and those cutting them -- was still positive at 8 percent.

But the reading, which is seasonally adjusted, was down 7 percentage points from the first quarter and 8 percentage points from a year earlier.

Lucille Wu, managing director of Manpower Greater China, said the decline was mainly because of the new Labour Contract Law, which took effect at the start of 2008.

"The law is further regulating corporate employment activities. Furthermore, misunderstandings of some articles of the law also lead enterprises to adopt more cautious hiring activities," Wu said.

The survey showed that employers in the services sector had the strongest hiring plans; the least optimistic were in finance, mining and construction, transportation and utilities.

Big events such as the Beijing Olympic Games and the Shanghai World Expo, the policy priorities set out in China's 2006-2010 five-year plan and a positive macroeconomic environment would sustain job growth in the services industry, Manpower said.

It said the employment outlook in central and western China was quite impressive, especially in the cities of Wuhan and Chongqing, due to their booming services sector.

Taiwan was the least optimistic Asia-Pacific job market, according to Manpower's survey, while Singapore and India anticipated the strongest hiring.

For a related story on the global hiring outlook, especially in the United States, please double-click on [ID:nN10460897] (Reporting by Langi Chiang; Editing by Alan Wheatley)

A "Made in China" tag usually means the goods cost less to make there than in the U.S.

But the difference in labor and other expenses with the rest of the world is narrowing. And new labor laws could add to the cost of doing business in China.

New rules that went into effect on Jan. 1 could offer more job security for Chinese workers, analysts say. On paper, the rules will require firms to sign contracts with longtime employees and shell out overtime pay. They'll also make it easier for workers to unionize.

"China can't afford to have tens of millions of workers who are getting abused," said Auret van Heerden, president of the Fair Labor Association.

FLA is a Washington, D.C.-based coalition of companies, universities and other groups promoting better labor practices worldwide. Most FLA firms are apparel makers. They include Nike, (NKE) Nordstrom (JWN) and Eddie Bauer, (EBHI) which all have workers in China.

Given China's record of passing and then ignoring labor rights laws, some say the new laws could be another toothless tiger.

"They have sets of laws that, if companies followed them to the letter of the law, would make things much different," said Andrew Connor, a senior associate at recruiting firm Pacific Bridge, which finds managers for firms in China. "But what's in the law isn't necessarily what happens in China."

U.S. Firms See Little Impact

American companies operating abroad usually follow U.S. work standards. Those are already more strict than the laws in China and other developing countries.

"We'll have to watch and wait and see what happens," said George Scalise, president of the Semiconductor Industry Association. "We're staying in touch with a number of people in HR departments (of U.S. companies with facilities in China)."

The rules' biggest impact likely will be on Chinese firms, says SIA spokesman John Greenagel. "From where we stand, we have learned they aren't used to doing business this way."

Many U.S. electronics firms have operations in China. Chipmakers Intel, (INTC) Advanced Micro Devices, (AMD) Cypress Semiconductor (CY) and Micron Technology (MU) all have test and/or packaging facilities there.

Cypress CEO T.J. Rodgers says U.S. firm have to employ people in China if they want to sell there.

"If you want to play in China, you have to have resources in China," Rodgers said.

But he figures the laws won't add much to the cost of American firms doing business in China. He views them mainly as another layer of bureaucracy.

Victor Ma, head of Websense's human relations in China, agrees.

"There might be a cost to the employer (for added paperwork), but the cost is unremarkable," Ma said. "It is small, and can be balanced by higher productivity."

Websense moved part of its operations to China in January 2007. The Internet filtering and security software firm now has 120 employees there, or 10% of its staff.

Worker Rights

Under China's new laws, companies have to sign work contracts with all permanent employees who've been there at least 10 years.

SIA's Scalise notes that most U.S. firms already do so in China. But up to 80% of Chinese workers have had no job contracts, according to various estimates.

The rules also force firms to pay overtime wages — a practice not always followed by Chinese firms.

The new rules could reduce China's notoriously high employee turnover. Many Chinese factories have 100% annual turnover. Analysts seldom capture that cost of doing business in China, says FLA's Van Heerden.

Lower turnover would boost productivity and lower hiring and training costs, watchers say.

The new laws also strengthen the hand of the country's main union, the government-backed All-China Federation of Trade Unions. They give the ACFTU the right to bargain with employers for the first time. The union says it wants to organize workers at foreign-owned companies.

The rules' ACFTU ties might give them a better chance of being enforced. As retail giant Wal-Mart (WMT) found out, the state-backed union can be very persuasive.

Wal-Mart has resisted unionizing efforts in the U.S. But in August 2006, it let the ACFTU organize its 30,000 employees in the 60 stores it had in China at the time. Public pressure played a role in the retailer's decision.

"Wal-Mart made a decision to comply rather than fight it because of the negative image they were afraid of getting," Connor said. "When you're dealing with an authoritarian government like China, things are open, but you don't know when they can close."

It was a smart business move for Wal-Mart. As of February, it had more than tripled the number of stores it has in China to 202.

In the long run, U.S. firms have no choice but to go along with the law and deal with the newly powerful union, says PricewaterhouseCoopers analyst Ed Pausa. "A number of international companies will resist, (but) I don't think they will succeed."

As costs rise in China, some U.S. companies are looking elsewhere, including Vietnam and India.

"Vietnam is becoming more attractive and stable. Wages are still lower than China," Connor said.